Bulgarian prosecutors searched the offices of State Fund Agriculture on July 7 2008, Bulgarian news agency BTA reported, quoting sources familiar with the investigation.

The prosecutors seized paperwork filed for projects under European Union pre-accession aid programme Sapard, filed by a company whose name was not disclosed, the agency said.

The prosecution raid comes only days after Bulgaria's Deputy Prime Minister in charge of EU Funds Meglena Plougchieva said that funding for 624 projects, worth a total 276 million leva, has been frozen following an investigation of the European anti-fraud office (OLAF) on suspicion of corruption and malfeasance.

Funding was frozen after OLAF's probe found out that Bulgaria's State Fund Agriculture, in charge of the payments agency for Sapard funds, exercised next to no control over who received the money, allowing freshly set up companies with ties to firms already banned from submitting funding requests, to receive Sapard funds, Dnevnik daily said.

Read the update on this story at sofiaecho.com.