site.btaEuropean Public Prosecutor's Office in Sofia Indicts Five Bulgarians in EUR 6 Mln Construction Machinery Fraud

The European Public Prosecutor's Office (EPPO) in Sofia has filed indictments against five Bulgarians suspected of defrauding the EU budget for over EUR 6 million in a large-scale scheme involving construction machinery, the EPPO said in a press release on Saturday. The defendants allegedly were part of an organised crime group, which had the express goal of misappropriating EU funds.

To this end, the group set up eight different companies, which they managed either directly or indirectly through third parties. These companies would then apply for funding under Operational Programme Innovations and Competitiveness 2014-2020 to improve energy efficiency for small and medium-sized enterprises (SMEs), which itself was co-financed by the European Regional Development Fund.

These companies purchased 38 separate pieces of construction equipment, including dumpers, excavators, front loaders, a bulldozer, trucks, sieves, and haulers, for a total cost of EUR 6,046,553. However, the machinery was never put into service in accordance with the funding agreement, and was partly sold instead.

In 2022, the EPPO conducted searches and seizures across 25 locations in Sofia, Pernik (Western Bulgaria), and Montana (Northwestern Bulgaria), including at the headquarters of the companies, as well as related properties. Documents, computers, and a mobile device were seized by the Interior Ministry's General Directorate for Combatting Organised Crime, alongside the construction equipment at issue.

In addition to the above, a separate money laundering investigation has been initiated against one of the defendants for allegedly transferring EUR 3 million to an Austrian bank. The investigation started based on an initial report by the European Anti-Fraud Office (OLAF).

If found guilty, the defendants face one to six years of imprisonment for the misuse of EU funds, and an additional three to ten years for participation in an organised criminal group, the EPPO's press release reads.