Charges have been brought against three of the officials involved, while the liability of one is still being assessed. Latvian Television reports that three of the four persons involved in the case are former Mayor Vents Armands Krauklis, the head of the Ērģeme parish administration Pēteris Pētersons, and a board member of the cider brewery "Mūrbūdu sidra darītava" Ltd Krišjānis Putniņš.
KNAB has referred the criminal proceedings to the European Public Prosecutor's Office (EPPO). The investigation has uncovered evidence that a representative of a beverage producer, together with two officials of the Valka municipality, allegedly defrauded the European Union (EU) Structural Funds and the Latvian state budget on a large scale with material damage of €581.709.76 to the EU and Latvia.
"This is the first criminal case successfully investigated by the KNAB on alleged fraud of EU funds, which has been referred to the EPPO for prosecution. It is unacceptable that criminal and fraudulent methods were used to attract structural funds. KNAB will continue to work closely with the EPPO to prevent EU fund fraud," explains Ineta Cīrule, KNAB Deputy Head for Investigative Activities.
As a result of the pre-trial investigation, KNAB suggested to the European Public Prosecutor's Office to prosecute two Valka municipality officials and a company representative for large-scale fraud.
The case regards building a facility in the municipality for whom a tenant were to be selected in an open tender. The investigation has found that the tenant was already known before. In cases where the potential tenant of a particular facility is unknown and is selected following an open tender, the municipality is entitled to mobilize up to 85% of the EU funds.
If the facility is being built for a specific purpose and the potential operator is known, EU co-financing is available between 45% and 55%, with a higher contribution from the company itself. The Central Finance and Contracts Agency (CFLA) is the responsible authority for monitoring the allocation and use of EU funds.
