Bulgarian Entrepreneur Charged with Fraud to Obtain EU Funds for Dairy Facility

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The European Public Prosecutor’s Office (EPPO) filed an indictment Thursday against a Bulgarian entrepreneur who allegedly falsified documents for a loan to fund construction of a dairy processing facility.

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Reported by

Henry Pope
June 28th, 2024

Prosecutors said that the entrepreneur requested the loan after receiving support from the Bulgarian’s State Fund for Agriculture to build and manage a factory designed to process raw milk and other dairy products.

While this support amounted to 474,000 euros (US$508,000) in funding, the entrepreneur sought an advance payment and so submitted a bank guarantee in order to solicit EU funds.

The request was rejected upon review of the paying agency, who said that the application did not meet certain requirements. When asked which requirements were lacking, EPPO told OCCRP that the bank guarantee on the application was only set to come into force on the day the advance payment was received, rather than the date of the application’s issuance.

Following this rejection, the entrepreneur resubmitted the request. This time, however, they allegedly forged an amendment to the original bank guarantee, to make it appear as if the bank had approved the changes, thus misleading the paying agency, prosecutors said.

The advance payment was subsequently approved, and 237,000 euros ($254,000), equivalent to 50 percent of the funds, were issued to begin construction of the dairy facility.

However, investigators allege that construction never even began; the funds were instead used to pay off other obligations held by the beneficiary, EPPO told OCCRP.

If convicted, the defendant faces a two to eight year prison sentence.