The 32-year-old midfielder was charged with “committing the criminal offence of giving false testimony” last June during a trial against Zdravko Mamic and three others before a local tribunal, a prosecutors’ statement said.
In line with Croatian law the prosecutors did not name Modric as the indictee but identified him as a “Croatian citizen born in 1985.”
Local media identified him as Modric.
The indictment has yet to be approved by a court and the Croatia captain is currently not threatened with an arrest.
Mamic is accused — along with his brother Zoran Mamic and two others — of abuse of power and graft that cost the former Croatian champions more than 15 million euros ($18.4 million), and the state 1.5 million euros.
Cash was allegedly embezzled through fictitious deals related to player transfers. Modric testified last June over the details of his 2008 transfer from Dinamo to Tottenham Hotspur.
From there he joined Real Madrid in 2012.
The prosecutors allege that Modric, when questioned at the tribunal, falsely said he had an annex to a contract with Dinamo over conditions for future transfers, giving him the right to a “50-50 share in transfer fees,” while still playing in Croatia.
He also falsely testified he had signed such an annex every time he extended his contract, they said.
When questioned during investigations in 2015, Modric said the annex was signed after he joined Tottenham, according to the prosecutors.
The entire amount of the transfer fee was eventually acquired by Dinamo, the prosecutors said.
Modric, also accused of tax fraud in Spain, has paid Spanish fiscal authorities close to one million euros, a judicial source in Spain said in January.
Spanish prosecutors believe he evaded 870,728 euros on revenue from his image rights in 2013 and 2014 via a shell company set up in Luxembourg.
Judicial authorities are still investing financial holdings belonging to the player in the Isle of Man, on which Modric refused to comment in court.
– Biggest star –
The indictment could also shake Croatia ahead of World Cup finals in Russia as Modric is the biggest star they have had since 1998, when they surprisingly reached the World Cup semi-finals, losing to eventual winners France.
Croatia play in Group D along with Argentina, Iceland and Nigeria.
The Croatian Football Federation (HNS) immediately voiced support to Modric and said in a statement it believed he would “prove his innocence as well as the indictment’s unfondness.”
The federation said they were convinced the proceedings will have @no negative impact on the performances of Croatia squad” at World Cup.
Last October, Modric was named, for the third time, to the FIFA FIFPro team selected by thousands of professional players. In 2015, he became the first Croatian voted on to the FIFPro XI.
Modric, who grew up as a refugee in Zadar on the Dalmatian coast, was highly popular in Croatia where he has a reputation for modesty.
But the testimony has tarnished Modric’s image as many Croatian fans fear it could undermine the charges against Mamic, who they believe has abused football for personal gain.
Most Croatian football fans see Mamic as the real boss of the Croatian Football Federation and believe its formal chief Davor Suker is merely his puppet.
“My conscience is clear,” the 103-capped Modric told reporters in July after being questioned within a probe on his alleged false testimony.