Large-scale fraud involving the EU’s post-COVID recovery fund has been under close scrutiny from journalists and the European public for an extended period. The Recovery and Resilience Facility (RRF) was established to support the recovery of European countries affected by the COVID-19 pandemic. Hundreds of billions of euros were intended to finance economic transformation, digitalisation, the energy (green) transition, as well as infrastructure and social projects.
However, a portion of the funds allocated has been subject to fraudulent schemes involving unscrupulous beneficiaries and other actors involved in their distribution.
According to data released by the European Public Prosecutor’s Office (EPPO) on 2 March 2026, by the end of 2025 it was conducting 512 investigations related to the misuse of RRF funds, representing a 67% increase compared with the previous year. A European Commission report of 28 July 2026 stated that the aggregate potential financial damage associated with these cases amounted to approximately €5 billion.
For comparison, at the end of 2024, EPPO had 307 active cases involving an estimated €2.8 billion in potential damage. Thus, within a single year, the number of investigations increased by more than two-thirds, while the estimated potential damage rose by approximately €2 billion. Investigations have established that perpetrators used shell companies and falsified financial documents, inflated the cost of works, reported works that had not actually been carried out, and engaged in money laundering.
Italy, the largest recipient of RRF assistance, has emerged as the leading country in terms of detected fraud schemes, having received more than €190 billion in grants and loans. According to Politico on 4 April 2024, as part of a major international operation codenamed Resilient Crime, Italy’s Guardia di Finanza, supported by EPPO, arrested more than 20 individuals who had allegedly attempted to misappropriate more than €600 million allocated to projects and reforms aimed at improving the competitiveness of small businesses through a network of fictitious companies.
Investigators also uncovered other schemes involving the diversion of tens of millions of euros through fictitious training courses for employees and artificially inflated service costs, followed by the laundering of the proceeds through offshore structures, cryptocurrencies and insurance products. The criminal group reportedly used artificial intelligence to generate fraudulent documents and operated through a network of shell companies registered in Austria, Romania and Slovakia to obtain and launder subsidies allocated for digitalisation and energy-efficiency improvements.
In Romania, abuses involving RRF funds and related European funding programmes have primarily concerned manipulation of public procurement procedures, IT consulting and fictitious documentation. According to EPPO on 13 August 2026, investigators uncovered a scheme involving irregularities in 29 IT projects worth €7 million. Contractors allegedly copied consultancy documentation and submitted knowingly false information in order to secure preferential treatment for selected providers of cloud solutions to local authorities.
In addition, Romanian authorities uncovered a €20 million fraud scheme involving industrial production projects, including lithium-ion batteries. Those involved allegedly used falsified financial statements, while corrupt officials fabricated and signed inspection reports relating to supposedly conducted oversight and audits that had not in fact taken place. According to EPPO’s annual report, Romania has become one of the EU leaders in the number of proceedings initiated over the misappropriation of European grants and subsidies. A significant proportion of these schemes reportedly relied on falsifying eligibility conditions to obtain funding, followed by the transfer of capital through transnational financial networks and cryptocurrency exchanges.
The problem with the RRF is not limited to inadequate auditing of individual projects. From the outset, the Facility has operated under a model unusual for the EU budget: Brussels disbursed substantial tranches primarily upon the achievement of pre-agreed milestones and targets relating to reforms and investments. The amount of each payment was not directly linked to the cost of the project concerned. Primary responsibility for monitoring final beneficiaries, conducting procurement procedures and overseeing specific expenditures rested with the recipient Member States.
The European Court of Auditors, in Special Report No. 06/2026, identified a number of systemic vulnerabilities, including insufficiently detailed anti-fraud requirements, weak preventive mechanisms and inadequate use of data-mining tools to identify suspicious transactions. Auditors also highlighted the risk of double funding, whereby the same project could be financed simultaneously through the RRF and another fund serving a similar purpose. Insufficient financial monitoring of the movement of funds was identified as a further weakness. In June 2026, the European Court of Auditors reported that the European Commission does not collect or track data on the amounts spent on each individual project declared under the RRF. For public disclosure purposes, only lists of the 100 largest final recipients in each country were mandatory. Where projects were implemented through public procurement, the formal final recipient could be a government authority, while information on actual payments made to private contractors could remain outside effective public scrutiny.
The RRF was established under exceptional circumstances during the pandemic, when the rapid restoration of economic activity was the overriding priority. The combination of hundreds of billions of euros in funding, accelerated disbursement procedures, decentralised oversight and limited transparency regarding final beneficiaries and the actual use of funds created an environment that could be exploited by corporate and corruption networks linked to certain public-sector structures, as well as by individual unscrupulous actors seeking to exploit systemic weaknesses for personal enrichment.
Misuse of EU funds is therefore not merely a large-scale fraud problem; it also exposes shortcomings in the overall system for monitoring how EU funding is used by recipient Member States. The European Commission now faces the task of strengthening auditing, oversight of final beneficiaries and tracking of financial flows, while closing the regulatory and institutional gaps that have allowed RRF resources to be exploited through fraudulent schemes.