Under pressure from the European Commission to produce convictions to show that it is making progress against corruption, Bulgaria has produced a number of stories in recent days involving action against alleged abuses of funds and other scams.

On November 16 2008, Bulgarian mass-circulation daily Trud reported that Bulgaria's State Agency for National Security had unravelled a 10 million leva scam involving alleged siphoning of value-added tax (VAT) refunds by Plovdiv-based companies and offshore firms.

According to Trud, the VAT scam involved properties being sold and re-sold at inflated prices, and sellers got their tax credits back in record time.

An unidentified former tax official, who for the past 10 years had been involved in the wine business, was involved in the scam, the newspaper said.

A day later, Bulgarian news agency Focus quoted Plovdiv district prosecutor Andrei Atanassov as saying that the prosecutor's office was dealing with two cases involving alleged defrauding of EU funds.

An investigation completed four months ago had involved a dairy farm that had been given 400 000 leva on condition that the facility would operate for at least four years.

Atanassov said that the investigation had found that the dairy farm was not operating. The owner said that work had been suspended because of electricity supply problems, and gave prosecutors documents showing that he had bought processing equipment.

However, it turned that these documents contained false information, and the owner, a 55-year-old with no previous criminal record, was currently out on 5000 leva bail.

Atanassov said that investigators, who had questioned more than 25 witnesses and had drawn forensic experts into the probe, had recommended to the Sapard agency that it take steps to recover its funding.

The other case involved large-scale document fraud allegedly involving 612 000 leva given to build a fruit-drying facility. Documents certifying that the facility complied with Bulgarian law were found to contain false information and falsified signatures.

The 56-year-old owner was on 5000 leva bail, and prosecutors similarly had recommended to Sapard that it takes steps to get its money back. If found guilty, the accused could face up to 20 years' jail for document fraud.

However, another person alleged to have been involved in defrauding Sapard came back fighting. Business daily Pari reported on November 17 that Stoyan Dimitrov, owner of companies accused of draining Sapard funds, had decided to show his vineyards and a wine cellar in the village of Pamidovo after their existence and operation were called into question.

Dimitrov had been given a 2.2 million leva subsidy for his projects.

"Regretfully I am unable to give the exact numbers because all documentation was confiscated by investigating authorities," Dimitrov said. "This is causing me a lot of trouble in my correspondence and relationships with banks and other authorities," he said.

Pari quoted Dimitrov said that he intended inviting representatives of the European anti-fraud office Olaf.

"I want to show them that the money of European taxpayers was used for the development of many good things in agriculture. Without the Sapard subsidies I wouldn't have been able to create the wine cellar and the vineyards," Dimitrov said.
 
On November 16, it was reported by Bulgarian-language weekly Tema magazine that the first conviction in Bulgaria for defrauding EU funds had been handed down.

A 69-year-woman who had been manager of an association entitled the Agrarian Women's Club was given three years' probation and banned from occupying public office after pleading guilty to diverting for her personal use 85 000 leva paid to the organisation in 2005 and 2006 through the EU's Leonardo da Vinci programme. The funding was intended for educational seminars.
 
The woman was prosecuted after the fraud was reported to Bulgarian authorities by Olaf. Her conviction followed a four-month investigation.

On November 16, Bulgaria's European Integration Minister Gergana Grancharova said that Bulgaria was taking active steps against organised crime and corruption in a follow-up to the most recent report by the EC that was sharply critical of the country's failures in this regard.
 
Grancharova said that "the margin with verdicts having become effective is still discouragingly blank", Bulgarian National Radio (BNR) reported.

The EC and other EU member states were aware that efforts in Bulgaria had intensified.

"We have been working with the capacity of all institutions to make sure that the tone of voice of the next EC Bulgaria report will be radically different," Grancharova said.
 
On November 17, John Faull, the head of the EC Directorate on Justice, Freedom and Security, said during a visit to Sofia that the EC was expecting in the next four to five months to see courts handing down sentences after the reforms introduced in Bulgaria's justice and internal order sector.

Faull said that what the EC meant by results was conviction of criminals. In his words, there are no perfect laws and structures, and it is results that would show whether things had changed, BNR reported.