On the 27th of February 2023, the Juzgado Central de lo Penal of the National High Court (Audiencia Nacional) issued a conformity judgment (sentence bargain) convicting two persons for subsidy fraud (arts. 308.4, 308.1 Penal Code).

AB and CD, both of legal age and without criminal records, held positions in the Toledo Chamber of Commerce, Industry and Services. In the framework of a European Social Fund (ESF) project under the Operational Programme Employment, Training and Education 2014-2020, they submitted false documentation with the intention of obtaining an undue financial benefit. The grant was awarded by the INCYDE foundation, and the project was 80% subsidised by the European Social Fund and 20% by the beneficiary. The documentation submitted included hours not supported by any document, hours lent to the project and subcontracted to external companies, monthly salaries of staff in management positions fully charged to the project, among others.

The project was implemented between 1 November 2016 and 31 December 2017, and the Chamber submitted an inaccurate account of hours worked in order to obtain the total eligible amount on 5 April 2018. The approved budget for the project amounted to €1,000,000, of which €800,000 corresponded to the 80% grant from the European Social Fund. The European Commission de-certified a total amount of expenditure of EUR 150,938.60, of which EUR 120,750.88 corresponded to the 80% eligible expenditure. The amount of the salaries submitted by the beneficiary which was declared as certifiable expenditure amounted to 461,856.52 euros, of which 121,799 euros corresponded to the hours not eligible for the reasons described above.

The proceedings were initiated on 10 December 2021, and on 20 April 2022, wherein both defendants voluntarily made a deposit of EUR 60,899.50 each (therefore, a total deposit of EUR 121,799) in the Consignments Account of the Spanish Delegation of the European Public Prosecutor’s Office, expressing their willingness to acknowledge the facts under investigation.  A joint statement of agreement signed by the European Public Prosecutor’s Office (Madrid) and the defence lawyers, was submitted, in which the facts were qualified as constituting the offence of subsidy fraud.

AB and CD have been convicted of the offence of subsidy fraud. Both have been imposed with a fine of 30,000 euros each, as well as the loss of the possibility of receiving public subsidies for two months and the right to benefit from tax or social security incentives. In addition, they must jointly and severally pay INCYDE the amount of 40,750.88 euros, plus the corresponding legal interest. The defendants have been benefited by the qualified mitigating circumstance of reparation of the damage, as each one made a deposit of 60,899.50 euros in the consignment account of the Spanish Delegation of the European Public Prosecutor’s Office, expressing their willingness to recognise the facts investigated.

On the 24th of January 2023, the above-mentioned judicial authority also issued a conformity judgment (sentence bargain) convicting two persons of subsidy fraud and forgery (arts. 308.4 and 392 Penal Code).

In June 2020, AB, sole administrator of AGROCAPELU SOCIEDAD COOPERATIVA, submitted an application for partial financial assistance from the Operational Programme for fruit and vegetable producer organisations for the investment “”. After being asked to submit bids from different suppliers, he presented two forged quotations from LEGROSOL TALLERES SL and MAQUINARIA AGRÍCOLA VICENTE GIRALT, drawn up by CD, administrator of AURORA AGRÍCOLA, S.L., and the real invoice from AURORA AGRÍCOLA. AB presented these false documents to the Department of Rural Development and Environment of the Government of Navarre in order to obtain public funds. Although CD prepared the falsified budgets for AB, there is no evidence that he did so knowing that they would be used to apply for financial aid. However, AB submitted the forged documents knowing that they were forged, resulting in AGROCAPELU SCOOP receiving 177,965.41 euros and 125,230.82 euros for the request for the first partial payment and the balance of the 2020 implementation aid, respectively. The amount corresponding to the investment “” (10,252.50 euros) was repaid in full in March 2022.

The parties ratified the agreement reached and the defendants confessed to the crimes charged and agreed to the penalties and civil liability requested by the Public Prosecutor’s Office.

The accused AB is sentenced to a fine of 2,563.12 euros for subsidy fraud and six months’ imprisonment for forgery, in addition to the loss of eligibility for public subsidies and other tax benefits for one month and 15 days. The accused CD is sentenced to six months imprisonment for forgery and a fine of six months at a daily rate of 6 euros. Both defendants have a suspended sentence of 6 months imprisonment for the offence of forgery, subject to the condition that they do not recommit the offence within 2 years, with the warning that if they do so, the suspension may be revoked, and the sentence may be served in a penitentiary centre.

Author: Alejandro Hernández López
Subcommittee: Academic
Date: 06.04.2023

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