An investigation is underway in Spain over the suspected embezzlement of €1.8 billion of funds from the European Union.
Anti-corruption detectives in Andalusia believe they are investigating the country’s largest fraud ever uncovered.
Local officials are suspected of having siphoned off the money from funds granted for retraining programmes to help the unemployed, which is running at 36%.
The secret police investigation, codenamed Operation Edu, is in its preliminary stages and has not yet been filed with an investigating judge.
Investigators fear that regional governors, trade unions leaders and employers’ associations colluded to receive EU and government subsidies to conduct back-to-work training sessions that never took place.
Andalusia received € 2.3 billion from the European Social Fund in training grants between 2007 and 2013 and the central government contributed a further €710 million.
Some of the companies which received the grants actually closed down before any training had been given. Initial investigations have already discovered irregularities in 15 of the 20 companies that received unemployment training grants within the Malaga region during 2010.
Specialist investigators suspect that hundreds of millions went instead into the bank accounts of those involved in the alleged fraud.
The probe has also revealed a shortfall between the funds given for training purposes and the amount distributed by Andalusia regional authorities.
Financial records reportedly show that in some cases 75% of the grants were given upfront and the remaining 25% failed to be distributed by the Andalusian state authorities or returned to the institutions which provided it.
“At least 500 million has disappeared into thin air,” reported news website El Confidential.
