In mid-2012, the Ministry of Sustainable Development and Tourism (MORT) granted a building permit to Miloš Medenica, son of former President of the Supreme Court of Montenegro, Vesna Medenica, along with Rado Arsić, and Željko Kovinić. The permit authorized the construction of three tourist villas directly on the seashore in Krašići, a coastal settlement in the Montenegrin municipality of Tivat.

Miloš Medenica became involved in this venture through Rado Arsić and Željko Kovinić, who had sold portions of their land to him - 160 square meters - in 2006 for 16,000 euros. After obtaining the building permit and starting construction, Arsić and Medenica concluded an investment agreement in September 2016.

The agreement specified that Medenica’s investment in this venture would consist of his land, while Arsić would cover all construction costs for the villas, including the one in Medenica’s plot. In return, Arsić would receive 75% ownership of the completed structure on Medenica’s plot, while Medenica would retain 25%. Both parties agreed to limit the total investment in building the villa, including the plot contributed by Medenica, to 69,000 euros. However Medenica would later register the entire building as his own and sell it to a Turkish citizen in late 2021 for 700,000 euros.

The Montenegrin watchdog organization MANS also uncovered evidence that the developers had exceeded the authorized construction plan, adding an illegal 50 square meters and that they partially encroached on nearby state-owned and municipal plots.

Additionally, they built two concrete block walls on public land, cutting off a newly constructed promenade. As a result, MANS filed a criminal complaint against Miloš Medenica and Rado Arsić for illegal construction and land usurpation in the coastal zone in Krašići. The complaint was submitted to the competent prosecutor's office and MORT inspectors. However, the Basic State Prosecutor's Office dismissed the complaint against Medenica, while the outcome of the proceedings against Arsić remains unknown. MORT also denied MANS access to information regarding the inspection proceedings connected to the construction of concrete walls on public land.

Meanwhile, Miloš Medenica and his mother, Vesna, were arrested in May and April of 2022, respectively, on suspicion of being members of an organized criminal group whose members were involved in drug trafficking, as well as for complicity and unlawful influence. The trial against them and 14 other indicated individuals has faced multiple postponements, deepening concerns over prolonged judicial delays and accountability.

In October 2022, members of the Special Police Department visited the Municipality of Tivat and seized documents related to the construction of the villas. Authorities have not confirmed whether this action was directly connected to suspicions involving Medenica and his business partners.

While the outcome remains uncertain, the case serves as a reminder of the need for transparency, legal integrity, and active civil oversight to prevent the exploitation of public resources and regulatory processes for private gains.