Officers from the National Police and the Tax Office have shut down an outfit involved in avoiding VAT and laundering money to the tune of €60 million (€45 million in Spain) and have arrested 58 people in Spain, Germany, Belgium and Portugal.
Operation ‘Dreams’, which was launched back in 2015 on the basis of an official report from the Committee for the Prevention of Money Laundering, exposed the scam involving a group of Spaniards, Italians and Portuguese who issued €250 million worth of false invoices over the three-year period.
The invoices were issued by fictitious or dummy companies based in Spain, Hungary, Germany, Italy, Rumania, Bulgaria, Belgium, United States of America, Portugal and Cyprus.
Most of those under arrest are Spanish (47 men and 11 women) and several have existing criminal records.
Searches were carried out at 62 different addresses in Spain and in 39 other locations around Europe. The Spanish arrests were made in Badajoz, Elche (Alicante), Madrid, Málaga, Córdoba, the Basque Country, Navarra, Murcia, Pontevedra and Cataluña.
The fraud revolved around the sale of VAT-free electronic devices, through a series of intermediaries and partners, illegally undercutting other electronics companies.
The organization, with headquarters in Madrid and Elche, was allegedly being run from Spain by two men – a father and son of Indian origin, but with Spanish nationality – who have been operating together for over nine years. As a result of an initial investigation by the Spanish tax authorities in 2014, the pair moved to the USA to continue their criminal activities.
The fraud was not limited to electronic devices, but also involved luxury cars imported into Spain at reduced prices due to the VAT not being paid.
The money laundering activities were numerous and involved property investments, the sale and purchase of luxury cars, bank credits and investments in audio-visual companies in Spain, the USA and Hungary. More than €140 million was moved illegally through Hungary and Bulgaria in a two-year period.
Police have confiscated 52 luxury cars, computer hardware and software, a firearm, paperwork and €400,000 in cash.