West Midland MEP Nikki Sinclaire announced she would be referring Coventry City Council to the EU's anti-fraud department during a speech at the European Parliament in Strasbourg.
She claims there are "discrepancies" in the way the council used Regional Development Fund cash, compared to what the European Commission believed it would be used for.
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Six addresses have been searched as part of police investigations so far and seven arrests have been made.
A large part of Hagley Road in the south west of the city was cordoned off and later reopened.
Some rain overnight, becoming drier and much brighter tomorrow.