EPPO Spain: Double Claiming EU Funds Conviction for Company, Director

• A company and its director in Spain were convicted for double claiming salary costs from both national and EU funds.
• The fraud involved presenting employee salaries, already covered by Government of Navarra subsidies, as costs for an EU Horizon 2020 project.
• The illicit scheme caused a total financial damage of €26,000, with €10,200 impacting the EU budget.
• The director received a €276 fine, and the company was fined €6,500 and banned from receiving subsidies for nine months by the Audiencia Nacional.
• The European Public Prosecutor's Office (EPPO) secured the conviction, demonstrating its active role in protecting the EU's financial interests.

The fact that penalties were imposed despite full reimbursement of damages emphasizes the EPPO's commitment to upholding the integrity of EU funding mechanisms, indicating that restitution does not negate criminal liability for fraud.

A company and its director in Spain have been found guilty of engaging in a scheme to double claim salary costs, drawing funds from both national subsidies and an EU-funded project. This EPPO Spain double claiming EU funds conviction follows an indictment by the European Public Prosecutor's Office (EPPO) in Madrid. The fraudulent activity centered on misrepresenting expenses already covered by one source as legitimate costs for another, thereby securing an illicit financial advantage.

The company was a recipient of EU funding under the Horizon 2020 Programme, specifically for a project dedicated to the repair of returnable plastic packaging. Concurrently, it benefited from financial assistance provided by the Government of Navarra. These national grants were designed to promote employment, offering support for hiring young individuals under the age of 30, and to bolster companies' international trade efforts. The core of the fraud involved charging employee salaries, which were already subsidized by the Government of Navarra, as expenditure costs to the EU project.

The intricate nature of the double funding EU projects allowed the defendants to illicitly gain financial benefits. Employees' wages, already partially or fully covered through the employment promotion grants from the Government of Navarra, were subsequently presented as eligible expenses for the Horizon 2020 initiative. This deliberate act of claiming the same costs from two distinct public funding sources constituted a clear breach of funding regulations and principles of EU financial interests protection.

The total financial damage resulting from this fraudulent conduct amounted to €26,000. Of this sum, €10,200 was directly attributable to the European Union, while the remaining portion impacted the budget of the Government of Navarra. This precise quantification of harm underscores the tangible consequences of such illicit financial practices on public funds at both national and European levels.

The legal proceedings, spearheaded by the European Public Prosecutor's Office Spain, culminated in a definitive judgment. On October 5, 2026, the Central Criminal Court of the Audiencia Nacional delivered its sentence. The company's director received a 23-day prison sentence, which was subsequently commuted to a monetary fine of €276. The company itself faced a more substantial penalty, incurring a fine of €6,500 and, critically, a prohibition from receiving any public subsidies for a period of nine months.

Notably, the defendants acknowledged the facts of the case and fully reimbursed the entire amount of the damage caused. Despite this restitution, the court proceeded with the convictions and imposed the aforementioned penalties, highlighting the seriousness with which the judiciary, supported by the EPPO, views such offenses. The judgment has now become final, marking a conclusive end to this Horizon 2020 fraud conviction. The EPPO, as the independent public prosecution office of the European Union, is specifically tasked with investigating, prosecuting, and bringing to judgment crimes that infringe upon the financial interests of the EU, a mandate clearly demonstrated in this case.

This ruling, stemming from an EPPO Spain double claiming EU funds conviction, sends a robust message to all entities operating with public funds. It underscores the rigorous enforcement mechanisms in place to safeguard EU financial interests and prevent the misuse of taxpayer money. The fact that penalties were imposed despite full reimbursement of damages emphasizes the EPPO's commitment to upholding the integrity of EU funding mechanisms, indicating that restitution does not negate criminal liability for fraud.

For organizations and their legal counsel, this case highlights the imperative for stringent internal controls and transparent accounting procedures. Compliance officers must ensure that systems are in place to meticulously track and differentiate expenditures across various funding streams, thereby preventing any instance of double funding EU projects. The outcome from the Audiencia Nacional serves as a critical reminder that the European Public Prosecutor's Office is actively monitoring and prosecuting fraud, reinforcing the need for absolute adherence to funding guidelines to avoid severe legal and financial repercussions.

Compliance officers and legal counsel for companies receiving EU or national subsidies must implement stringent internal controls and clear accounting procedures to prevent any instance of double-claiming costs. This case demonstrates the EPPO's active enforcement against such fraud, leading to convictions, fines, and bans from future subsidies, even when damages are reimbursed.

Source: Original reporting via EPPO press release