The European Public Prosecutor’s Office (EPPO) on Tuesday said it was carrying out 40 house searches in Romania and France as part of an ongoing investigation into a €30 million fraud involving EU and national funds.
“At stake is a suspected criminal scheme to provide false letters of guarantee to awardees of projects financed by EU funds, which claimed to insure the projects against potential damages,” the EPPO said in a statement.
Searches were carried out in Roquebrune-Cap-Martin, a wealthy spot on the French Riviera, and in the Romanian cities of Bucharest, Alba, Arad, Cluj, Constanța, Hunedoara, Iași, Mureș and Olt. Seven law enforcement agencies are taking part in the operation, which is still ongoing.
According to the prosecutor’s office, between 2020 and 2023 “several fictitious banks or dubious financial entities” issued letters of guarantees for projects benefitting from EU funding, without the necessary cash to cover the insured damages. Investigators allege that the suspected perpetrators collected “large sums of money” in exchange for the letters. It is unclear who the suspected individuals are, but the EPPO added that it is likely they used the money for their own interests.
The scheme involved an entity based in the Comoros Islands that issued letters of guarantee to assure public authorities in Romania. Similar financial institutions operating in the Czech Republic, Latvia and Spain also issued letters of guarantee to be used in Romania, without having the right to do so, and without the necessary funds to cover the insured damages, the prosecutor’s office said.
Set up in June 2021, the Luxembourg-based EPPO has the power to investigate and prosecute crimes involving the EU budget, including cross-border fraud and corruption. According to the institution’s 2022 annual report, it is actively investigating 1,117 cases for estimated total damages amounting to €14.1 billion.
