Fifteen locations in Romania were searched this week as part of an ongoing investigation of the European Public Prosecutor's Office (EPPO) into alleged fraud concerning European funds of more than EUR 3 million. The funds were supposed to be used for the development of the Danube Delta, but the EPPO believes they were misused.

The searches were conducted on May 24 in Bucharest, Gorj, Giurgiu and the Danube Delta area.

The EPPO said that it suspects three people of forming an organised criminal group since early 2018 in order to defraud European funds for the development of the Danube Delta (Regional Operational Program 2014-2020). They allegedly developed a scheme with several companies, controlled either directly or through intermediaries, to wrongfully access EU funds and use them outside of the Danube Delta. According to the EPPO, the group continues to this day, "with each suspect having a well-established role and acting in a coordinated way."

The EU Public Prosecutor's Office said that two of the suspects made available to the group four companies that had wrongfully accessed European funds and used them in areas outside of the Danube Delta. "The suspects set up a system through which, based on inaccurate documents, they created a false appearance regarding the place of implementation of the projects, the existence of financial resources related to their own contribution and the transparent organisation of the procurement procedures. The manipulation of the procurement procedures led to the setting of artificially increased prices," the EPPO explained.

Meanwhile, the third suspect supplied equipment to the four companies at an overestimated price. "Given that the equipment was purchased with European funds (approximately 70%), the interest of the group was to keep the purchase prices as high as possible, in order to obtain reimbursement of the largest possible amounts of European funds. Subsequently, the difference between the actual price and the purchase price declared to the managing authority remained at the disposal of the group," the same source said.

Three other companies were used to overestimate the value of the equipment, all of them controlled by the third suspect. According to the prosecutors, the equipment was imported into Romania through the first company and then sold to a second company registered in Bulgaria. That's when the price was first increased. Then, the company based in Bulgaria sold the equipment to the companies controlled by the other two members of the group at increased prices again.

"In order to create an apparent justification for this price increase, a third company was used, creating the appearance that services associated with the equipment sold to the beneficiaries of European funds were provided, and in whose accounts the amounts resulting from the price increase were transferred," the EPPO said.

The estimated damage is RON 14.43 million (approx. EUR 3 million).

On May 25, the three were informed of the accusation. Bail was set for each, for a total of EUR 1.7 million.

The searches were carried out with the support of police officers from the EPPO Support Structure in Romania, police officers from the Economic Crime Investigation Directorate of the General Inspectorate of the Romanian Police (Directia de Investigare a Criminalității Economice din cadrul IGPR), Gorj County Police Inspectorate – Economic Crime Investigation Service (IPJ Gorj – Serviciul de Investigare a Criminalitatii Economice) and officers from the Romanian Gendarmerie (Brigada Speciala de Interventie a Jandarmeriei Romane).

The EPPO, which is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU, started operations on June 1, 2021. The European Chief Prosecutor is Laura Codruta Kovesi, a former head of Romania's Anticorruption Directorate (DNA).

irina.marica@romania-insider.com

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