Spanish Authorities Dismantle Huge VAT Fraud Network

The Spanish authorities have concluded a huge international law enforcement operation involving 5 countries with the support of Europol and  Eurojust which has resulted in the arrest of 22 suspects belonging to an organised crime group who are believed to be responsible for the defrauding of €26.5 million from the Spanish tax agency.

Authorities raided 24 properties belonging to the criminal gang including 18 across Spain.

The investigators seized 16 high-end vehicles and 13 properties worth an estimated €1.3 million as well as froze a dozen bank accounts held by the GANG  in 33 banks and financial entities.

Europol deployed its experts to Spain to support the Civil Guard, National Police and Tax authorities.

The criminal syndicate had operated a sophisticated tax avoidance scheme over the last 18 months including the use of front companies in Spain, Slovakia, Romania, Belgium, and the Netherlands to pretend a trade in goods took place when in reality, no goods were actually shipped as billed but remained in the same country.

VAT is required to be paid for all of types of this kind of transaction within the same country.

By pretending a trade across the EU, the VAT payment was avoided and henceforth the Spanish tax authorities defrauded upon by using a string of shell companies and forging trade documents.

At the request of the Spanish authorities, Eurojust organised a coordination meeting and set up a coordination centre within a few days. The Agency coordinated the transmission of requests for European Investigation Orders (EIOs) and freezing certificates for bank accounts across the EU.

Europol brought together investigators from all 5 countries to discuss the procedural requirements and agree on a clear way forward.
Its experts from Europol’s European Financial and Economic Crime Centre (EFECC) provided the exchange of information for the operation to succeed.