Four people arrested in Croatia in an EPPO investigation into payment for works from EU funds

Four people have been arrested in Croatia at the request of the European Public Prosecutor’s Office (EPPO), in an investigation into the use of an energy renovation project to pay for works that had not been carried out as part of it. EPPO announced on 30 October that it was investigating four people and two companies on suspicion of abuse of office. Prosecutors estimate unjustified payments of €104,284.81, covered by European recovery funds and a municipality’s budget.

In brief, EPPO is investigating four people and two companies. The four people were arrested on 29 October, and the details were announced the following day. The energy renovation project for a community centre is worth €349,818.83. The EU covers 80.16% of its eligible costs. Prosecutors suspect that the mayor, an engineer and the companies used pre-arranged bids and false documents to claim reimbursement for works outside the project. The estimated unjustified payments amount to €104,284.81, of which €83,594.70 is charged to EU funds and at least €20,690.11 to the municipality. The investigation is ongoing. The statement does not publish the suspects’ names or make a determination of guilt, and the presumption of innocence applies to all.

The arrests took place on 29 October during urgent measures carried out by the specialised Croatian police unit PNUSKOK. The new statement provides the first details about the suspected mechanism, following EPPO’s general announcement a day earlier concerning the operation linked to recovery funds. Investigating and arresting the individuals does not constitute a finding of guilt.

At the centre of the case is a €349,818.83 project launched in 2025 to renovate a community centre and improve its energy efficiency. It is co-financed through the Environmental Protection and Energy Efficiency Fund, under Croatia’s national recovery and resilience plan for 2021–2026. EU funding covers 80.16% of the project’s eligible costs.

According to prosecutors, the mayor of a municipality allegedly sought to obtain financial benefits for himself and other people. He allegedly agreed that the European project would cover the cost of works that the two companies had already carried out at the community centre, as well as the cost of works performed at homes belonging to members of his family.

EPPO describes a mechanism in which the companies’ bids were allegedly agreed in advance, while a supervising engineer allegedly included the completed works in the project budget at the mayor’s instructions. After the bid was selected, the suspects allegedly used false documents to request payment for works that had not been carried out as part of the energy renovation.

The engineer allegedly checked that documentation, after which €104,284.81 was transferred without justification to the accounts of the two companies. The sum represents the payments challenged by prosecutors, not the value of the entire project or money that had been announced as recovered.

Of the estimated damage, €83,594.70 would be borne by the EU’s Recovery and Resilience Facility, and at least €20,690.11 by the municipality’s budget. The two components add up to the value of the unjustified payments indicated by EPPO. The 80.16% figure concerns the co-financing of eligible costs; it does not prove that the project’s entire budget was defrauded.

The European mechanism finances reforms and investments under national plans through grants and loans. The obligation to protect funds against fraud and corruption remains separate from assessing whether the targets and milestones required for payments to states have been met.

The statement does not identify the municipality, the individuals or the companies, and does not announce a court ruling on the allegations. All persons concerned benefit from the presumption of innocence until their guilt is established by the competent Croatian courts. The investigation centres on whether the European project was used to claim reimbursement for costs outside the works for which it was funded.