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The big fat Greek plot to defraud the EU

“Farmers” raked in millions of euros for land they didn’t own or work.

By Nektaria Stamouliin Athens

Illustration by Justin Metz for POLITICO

The scheme to defraud the European Union had all the markings of an inside job.

The European Public Prosecutor’s Office (EPPO) is pursuing dozens of cases, in which Greek citizens received EU agricultural funds from 2017 for pastureland they did not own or had not leased, or for agricultural work they never did, depriving farmers of money to which they were entitled.

Under investigation is how the scheme was set up, as well the possible involvement of state authorities, in particular people working at the organization responsible for overseeing the distribution of the money, a state agency called OPEKEPE (the Organization for Payments and Control of Community Aid Guidance and Guarantees). 

While fraudulent applicants have already been brought to court, nobody at the organization has been charged. On the contrary, each time authorities at the agency tried to take action to dismantle the scam, they were forced out by the agriculture minister of the day.

The misappropriated funds could amount to €45 million a year, in one of the biggest farming frauds of recent years. The scheme has come to light before the EU begins discussions this year to set a new mid-term budget from 2028 to 2034. The Greek scandal is sure to give fresh ammunition to critics of the Common Agricultural Policy, known as CAP, which accounts for a third of the EU’s €1.3 trillion, seven-year budget.

Since its inception more than 60 years ago, CAP funding has been mostly tied to land area. Such entitlements are wide open to abuse, as the Greek scheme shows, and European Commission President Ursula von der Leyen is pushing for the money to be better spent. Yet the bloc’s top farm official, Christophe Hansen, wants to keep the link between land and money — while EU countries oppose fundamental reform.

One of the first to notice the irregularities was the head of OPEKEPE’s Internal Audit Department, Paraskevi Tycheropoulou. Her superiors responded by sidelining her — shutting her out of the organization’s databases and locking her out of her office. 

She has since been invited by EPPO to assist its inquiries and advise on technical and legal issues.

“Tycheropoulou’s methodology led to the uncovering of an extensive ring which, through false declarations of ownership, illegally received EU aid through the national reserve,” her lawyer, Antonis Vagianos, told POLITICO.

“There has been a concerted effort to discredit her … with the initiation of disciplinary proceedings against her and her illegal and vindictive removal from the position of head of the Internal Audit Department ‘on grounds of incompetence,’” he added.

OPEKEPE has changed presidents six times in the last five years. Those who tried to clean up the mess were quickly removed.

European prosecutors, whose remit is to track misuse of EU funds, have been investigating the Greek pastureland scheme since 2021 and are looking into some 70 cases, according to several officials. One has already been heard in Greek court, with the defendants being convicted and sentenced to prison terms. Two more will go to trial on Feb. 19.

Anatomy of a scam

EU funds to support farmers and livestock breeders in Greece are administered by OPEKEPE. Since 2005, the organization has been the country’s sole authority overseeing the disbursal of subsidies under the CAP. 

The agency, supervised by the agriculture ministry, pays out €3 billion annually to 900,000 beneficiaries, including farmers, agricultural cooperatives and export businesses.

One “farmer” declared ownership of three parcels of land in the Kastoria region. | Creative Commons via Flickr

The scheme began after changes to EU legislation in 2017 opened up more land for grazing in the Mediterranean region. The broader definition, which Greece had lobbied for, included not only grassland but also scrubland and wooded pasture. 

As a result, the eligible area in Greece almost doubled — and with it the opportunity to commit fraud.

Officials from OPEKEPE and the technical companies working with them were the first to gain access to the new land records. Soon after, applications started coming in from individuals purporting to be owners or tenants of grazing lands, but who lived in completely different parts of the country from the parcels for which they were putting in claims, according to several officials who have worked in the organization and submitted complaints, and internal audit documents seen by POLITICO.

Claimants would declare land ownership without supporting documents, such as purchase and sale contracts; instead entering a number on an application form. Under an OPEKEPE directive, its auditors weren’t required to check contracts or property titles, or to compare declarations against prior years.

Some tracts were declared as the property of one beneficiary in one year, and then of another the next year. The same piece of land is never claimed twice, indicating that someone with overall access to the records was orchestrating the scheme, according to several officials involved in the investigation who spoke to POLITICO.

“This scheme could not have been set up without having someone in the organization telling you which pieces of land are available throughout the country and orchestrating that there will be no ‘double booking’ in the alleged owners of the land,” a former OPEKEPE official told POLITICO.

‘Evidence of complicity’

Current and former officials describe a scheme that worked on three levels: OPEKEPE gave access to information on available grazing land to its technical advisers; officials in the scam turned a blind eye to dodgy applications or issued circulars that helped perpetrators evade investigation; while managers at the agency who tried to tackle the scheme were forced out.

“This would not be possible without the coordination of someone who has access to the map with the available areas and what has already been declared,” said one agriculture ministry official. 

Most of the fake filings were made from Crete, which received two-thirds of Greece’s total EU agricultural subsidies in 2020, according to OPEKEPE figures. In contracts and legal documents seen by POLITICO, individuals from the southern Greek island claim to own land elsewhere — from northern Greece to the Peloponnese and islands.

“There are so many farmers from Crete declaring land all over Greece, none of the applications happen to fall in the same area, and no one declares the same piece of land,” added the agriculture ministry official.

Fields on the island of Crete, where most of the claims have been made. | Belga Image

Applicants received funds for land outside Greece in 34 cases, including one who claimed for a plot in neighboring North Macedonia, which isn’t even in the EU, Greek investigative website “Inside Story” revealed.

“We identified them in 2021 and asked them to pay back the money,” said one former OPEKEPE official, granted anonymity due to the sensitivity of the matter. “But the problem in the region was much wider.”

In 2019, two individuals from Rethymno, Crete, applied for subsidies for leased land on the island of Tzia for use as pasture. Their application included rental contracts which identified two other residents of Rethymno as the owners. They received some €73,000 in EU funds.

The following year two other Rethymno producers leased the same land on Tzia and, in contracts submitted to OPEKEPE, the land appeared to have new owners.

“The purported alternating owners of the same pieces of land in Tzia in the Cyclades changed the land like shirts,” said a report submitted to prosecutors in Rethymno by the then-president of OPEKEPE, Gregorios Varras. “There is serious evidence of complicity.”

A Greek court sentenced the Rethymno scammers in October to prison terms of 12 to 24 months — the first major convictions in the fake grazing scheme. The case was supported by facts and figures submitted by EPPO and a European prosecutor participated in the court hearing.

In another case, which goes to trial on Feb. 19, a man from Crete claimed to be the owner of grazing land in Grammos, in northwestern Greece. The individual, a former subcontractor with the agriculture ministry, is accused along with family members of receiving thousands of euros after claiming to be renting 450 acres in mountainous terrain near the Albanian border.

The individual returned the “unduly” paid subsidy, hoping to escape punishment. However, he and five other family members face felony charges.

Lawyers for the suspects declined to comment on their behalf.

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