EPPO Croatia: 4 Arrested in Earthquake Fund Fraud Probe

• Four individuals were arrested in Croatia following an EPPO investigation into alleged subsidy fraud related to earthquake recovery funds.
• The suspects, company owners, sought approximately €685,000 in non-refundable support from EU and national budgets.
• They allegedly submitted false claims to the City of Sisak, exaggerating damage to their greenhouses after a December 2020 earthquake.
• On-site controls by the Croatian Ministry of Agriculture revealed discrepancies, preventing the disbursement of the requested funds.
• The European Public Prosecutor's Office is investigating the attempted misuse of European Agricultural Fund for Rural Development money.

This case demonstrates that the EPPO actively investigates attempted fraud against EU financial interests, even if funds are not ultimately disbursed, highlighting the need for meticulous compliance to avoid criminal investigation and prosecution.

The European Public Prosecutor's Office (EPPO) in Zagreb, Croatia, has launched an investigation into four individuals suspected of subsidy fraud, specifically targeting funds intended for earthquake recovery. These four suspects, identified as company owners, allegedly attempted to illicitly acquire approximately €685,000 in non-refundable support. This significant sum was co-financed by the European Agricultural Fund for Rural Development (EAFRD) and the Croatian State Budget, earmarked for the restoration of agricultural land and production capabilities severely impacted by an earthquake that struck the Sisak area on December 29, 2020.

Between February and December 2021, the suspects, each representing their respective companies, submitted damage claims to the City of Sisak. These claims are now believed to have falsely exaggerated the extent of damage to their companies' greenhouses. Following the issuance of verification records by the Croatian Ministry of Agriculture, which were based on these allegedly fraudulent claims, the suspects proceeded to submit formal grant payment requests to the Paying Agency for Agriculture, Fisheries and Rural Development. The total amount requested was €685,077.19, with €582,315.60 (85%) originating from the EAFRD and the remaining €102,761.59 (15%) from the Republic of Croatia's State Budget. However, due to diligent control procedures, these funds were never disbursed.

This EPPO Croatia earthquake fund fraud investigation saw the four suspects arrested on September 30, 2026, following a request from the European Public Prosecutor's Office. The investigative activities were conducted in close cooperation with the Zagreb Police Department, underscoring a coordinated effort to combat financial crime. The EPPO, as the independent public prosecution office of the European Union, holds the critical mandate to investigate, prosecute, and bring to judgment crimes that adversely affect the financial interests of the EU. This case highlights their proactive role in safeguarding European funds.

All individuals involved are afforded the presumption of innocence, a fundamental legal principle, until their guilt is conclusively proven in the competent Croatian courts of law. The ongoing inquiry aims to establish the full scope of the alleged subsidy fraud and ensure accountability for any attempted misuse of public funds.

The attempted fraud targeted funds crucial for rural recovery, specifically those co-financed by the European Agricultural Fund for Rural Development (EAFRD). This fund is a cornerstone of the EU's Common Agricultural Policy, designed to support rural areas, enhance agricultural competitiveness, and promote sustainable management of natural resources. The alleged EU funds misuse in Croatia, specifically in the Sisak region, represents a direct challenge to the integrity of these vital programs.

The prevention of the payout in this instance was a direct result of robust oversight mechanisms. The Paying Agency for Agriculture, Fisheries and Rural Development initiated a comprehensive control procedure on the submitted requests. During this process, employees from the Croatian Ministry of Agriculture conducted on-site verifications, which conclusively established that the damage declared in the initial claims did not correspond with the actual damage observed. This critical step in grant control prevented the fraudulent disbursement of both EU and national funds.

This case serves as a stark reminder of the continuous vigilance required to protect the European Union's financial interests, even when funds are not ultimately lost. The fact that the EPPO actively investigates attempted fraud against EU financial interests, even if funds are not ultimately disbursed, highlights the need for meticulous compliance to avoid criminal investigation and prosecution. For legal professionals and compliance officers advising clients on EU grant applications, particularly those related to disaster relief or rural development, this incident underscores the paramount importance of accurate reporting and the implementation of robust internal controls.

The EPPO's intervention in this matter, preventing the alleged European Agricultural Fund for Rural Development fraud, sends a clear message that attempts to defraud EU budgets will be met with rigorous investigation and potential prosecution. This proactive enforcement strengthens the integrity of EU funding mechanisms and reinforces trust in the systems designed to support member states in times of crisis and for long-term development.

Lawyers and compliance officers advising clients on EU grant applications, particularly for disaster relief or rural development, should emphasize the critical importance of accurate reporting and robust internal controls. This case demonstrates that the EPPO actively investigates attempted fraud against EU financial interests, even if funds are not ultimately disbursed, highlighting the need for meticulous compliance to avoid criminal investigation and prosecution.

Source: Original reporting via the European Public Prosecutor's Office.