EU-Paraguay probe nets fraudster

Rubio has been living in Paraguay for a long time

The EU's anti-fraud office Olaf has welcomed Paraguay's jailing of a Spanish priest and his Paraguayan accomplice for embezzling EU funds.

Paraguay's Supreme Court sentenced Jose Antonio Rubio to three years in prison on 1 September for diverting 2.3m euros (£2m; $3.3m) from an EU aid project.

His accomplice also got three years for the fraud. The funding was supposed to deliver water to Paraguayan villages.

Olaf and Paraguayan officials are still investigating some suspicious invoices.

Olaf Director-General Franz-Hermann Bruener said the judgement showed that EU co-operation with national justice authorities "can lead to excellent results, even far beyond the borders of the European Union".

The EU-funded project was designed to improve the drinking water supply in 50 communities in Paraguay and to provide them with a sewage system.

The EU allocated 4.8m euros to the project, which was managed by a non-governmental organisation run by Rubio and the Paraguayan co-director.

Olaf began investigating the case in 2004, tipped off by the European Commission.

The main beneficiary of the embezzled funds was "a person close to the European co-director of the project", Olaf said. The beneficiary was sentenced previously.

Olaf says it discovered "substantially inflated invoices" for the construction of nine water wells, which the Paraguayan authorities are currently investigating.