The Bureau for Prevention and Combating Corruption (BPBK / KNAB) has proposed to the European Public Prosecutor's Office (EPPO) to initiate criminal prosecution against three officials of the Valka municipality, including Mayor Venta Armands Krauklis, on suspicion of large-scale fraud carried out within the framework of a project to create a production area, reports the LETA agency.
According to BPBK, as a result of possible criminal actions, more than 168,000 euros from the European Regional Development Fund and the state budget of Latvia were fraudulently appropriated.
Municipalities can attract funds from EU structural funds for the construction of production facilities on their owned land, which, after the project is implemented, are offered for rent to the private sector. If the potential tenant of the facility is not known in advance and will be selected through an open competition, the municipality has the right to attract up to 85% of the funding from EU funds.
However, if the facility is built for a specific purpose and the entrepreneur who will work there is known in advance, co-financing from EU funds is possible in a smaller volume — from 45% to 55%, with the entrepreneur covering a larger part of the expenses.
During the investigation, BPBK obtained evidence that three officials holding positions in the Valka municipality at the time of the alleged crime conspired to build a production building to expand the business activities of a specific entrepreneur, that is, in his interests.
These officials did not inform the responsible institutions about the selection of a specific entrepreneur and fraudulently attracted more funding than provided for by regulations. As a result of the criminal actions, 160,000 euros were illegally obtained from the European Regional Development Fund and 8,026 euros from the state budget of Latvia.
Furthermore, BPBK indicates that one of the officials involved in the criminal proceedings is the manager of the alleged tenant of the production area.
Now the European Public Prosecutor's Office, as the procedural leader, will have to decide on the further course of the criminal proceedings initiated by the prosecutor's office on November 6, 2023.
BPBK emphasizes that funding from EU funds can be an important support for stimulating entrepreneurial activities in the regions of Latvia. At the same time, municipalities and entrepreneurs should remember that these funds are taxpayer money from the entire European Union, and therefore their attraction and effective use must be approached with particular good faith and responsibility.
As previously reported, last year BPBK transferred another criminal case to the EPPO, within which evidence was obtained that a representative of a beverage manufacturing company, together with two officials from Valka County, possibly committed large-scale fraud involving funds from EU structural funds and the state budget of Latvia.
Thus, the actions of these individuals could cause property damage to the EU and Latvia amounting to 581,709 euros.
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