Bulgaria upends money laundering convictions in EU test case

(SOFIA) - A Bulgarian appeals court on Friday overturned money laundering convictions for industrialist Mario Nikolov and five other Bulgarians in what the EU sees as a test case for Sofia's fighting fraud.

All six were acquitted of "participation in an organised criminal group and money laundering," said Borislava Radoeva, who is in charge of the court's press service.

In March 2010, Nikolov was sentenced to 10 years in prison and fined 30,000 leva (15,000 euros, 19,000 dollars) for laundering funds obtained through the European Union's Special pre-Accession Programme for Agriculture and Rural Development (SAPARD) and for establishing a criminal group.

His wife Mariana was sentenced to eight years in prison and four others received six-year prison terms in the case. They were also given fines.

Nikolov and his convicted accomplices were sued in Bulgaria for having bought used machines for a meat processing business that they had claimed were new in order to obtain subsidies from SAPARD.

He and his accomplices pocketed 7.5 million euros (9.7 million dollars), according to the prosecutor's office.

The Bulgarian courts had launched two different proceedings on the same set of issues: one for money laundering and the establishment of an organised criminal group, and the other for embezzlement.

Kalin Kalpakchiev, the foreman of the jury of the Appeals Court, said the opening of the two parallel proceedings posed difficulties for proving the facts.

In the embezzlement proceeding, Mario Nikolov was sentenced in June 2010 to 12 years in prison. In August 2012, the Sofia Appeals Court discovered errors in the proceeding and determined that a new trial should take place.

The Nikolov affair, which had been brought to the attention of the Bulgarian authorities by the European anti-fraud office OLAF, has been followed closely by the European Commission.

Brussels regularly criticises Sofia for its ineffectiveness in preventing fraud with European funds and its failure to prosecute the culprits.