EPPO Romania: Searches Uncover €7.8M Social Enterprise Fraud

• The European Public Prosecutor’s Office (EPPO) in Cluj-Napoca, Romania, conducted nine searches in Bucharest on October 29, 2026, investigating alleged fraud in four EU-funded social enterprise projects.
• The suspected scheme is estimated to have caused €7,832,000 in damage to the EU budget, leading to six suspects being formally charged.
• The projects, part of Romania’s 2014–2020 Human Capital programme (POCU) and funded by the European Social Fund, aimed to establish social enterprises in disadvantaged areas.
• Allegations include suspects using controlled entities to divert funds, staging business plan selections, claiming for non-existent training, and manipulating purchases.
• Precautionary measures have been imposed on suspects’ real estate assets, valued at approximately €1,074,000.

The suspected scheme is estimated to have inflicted a financial detriment of €7,832,000 (equivalent to RON 41,510,878.25) upon the EU budget.

The European Public Prosecutor’s Office (EPPO) in Cluj-Napoca, Romania, recently conducted nine searches in Bucharest as part of an investigation into significant alleged fraud. These operations, carried out on October 29, 2026, targeted four projects that received European Union funding, designed to foster social enterprises in economically disadvantaged regions. The suspected scheme is estimated to have inflicted a financial detriment of €7,832,000 (equivalent to RON 41,510,878.25) upon the EU budget.

The coordinated searches took place at the residences of individuals under suspicion and at the business premises of various companies. Following these actions, six individuals were presented before judicial authorities to be formally apprised of the accusations against them, with judicial control measures slated for implementation in certain instances. The enforcement effort involved a collaborative team comprising police officers from the EPPO Support Structure in Romania – Cluj-Napoca, the Directorate for Investigating Economic Crimes, the Special Operations Directorate of the Romanian General Police Inspectorate, and the Romanian Gendarmerie.

Investigators allege that the suspects orchestrated a complex scheme by controlling, either directly or through close family members, a network of companies, associations, and foundations involved in the EU-funded social enterprise projects. These entities were purportedly used to channel grant money towards business plans submitted by individuals within the suspects' personal or professional circles, or where the suspects held a direct financial interest. The selection process for these business plans was allegedly manipulated to create a false appearance of fairness and transparency.

Further accusations detail that the evaluation of these business plans was not conducted by the individuals officially named in the supporting documentation, but rather by others. The EPPO investigation also suggests that funding was claimed for training courses that never actually took place, with fraudulent documents used to misrepresent their organization and delivery. Additionally, the suspects are believed to have manipulated procurement processes within the projects, including those involving Social Economic Structures, by utilizing intermediaries and companies under their control to illicitly extract funds from the grants.

The four projects at the heart of this EPPO investigation in Romania were implemented between March 2019 and November 2022. They operated under Romania’s 2014–2020 Human Capital programme (POCU), a national initiative significantly supported by the European Social Fund (ESF). The primary objective of these EU-funded social enterprise projects was to facilitate the establishment and growth of social enterprises in disadvantaged areas, offering both training and financial backing for approved business plans.

The European Public Prosecutor’s Office, an independent public prosecution body of the European Union, is specifically tasked with investigating, prosecuting, and bringing to judgment crimes that harm the financial interests of the EU. This ongoing EPPO investigation into alleged Romania Human Capital programme POCU fraud underscores the office's commitment to safeguarding European funds from misuse and corruption, particularly in programs like the European Social Fund, which are vital for social development.

In addition to the extensive Cluj-Napoca EPPO searches and formal charges, precautionary measures have been imposed on the real estate assets belonging to the suspects. These frozen assets are valued at approximately €1,074,000, reflecting a significant financial impact of the ongoing legal proceedings. The imposition of these measures is a critical step in recovering potential damages and preventing further dissipation of assets.

It is important to note that, in accordance with legal principles, all individuals involved in this case are presumed innocent until their guilt is established in the competent Romanian courts of law. This EPPO investigation into Romania EU funds highlights the rigorous enforcement efforts against alleged fraud, emphasizing the accountability required for managing European grants and the potential for substantial legal and financial consequences for those found to be involved in such illicit activities.

Lawyers and compliance officers advising clients involved in EU-funded projects, particularly social enterprises in Romania, should note the EPPO's active enforcement against alleged fraud. This development signals increased scrutiny on the management and allocation of EU funds, requiring a review of compliance frameworks, internal controls, and documentation practices to mitigate risks of investigation and asset freezing for clients participating in similar programs.

Source: Original reporting via EPPO press release.