Some 21 people have been arrested in Spain following the dismantling of an international VAT fraud and money-laundering network.
The international criminal organisation allegedly involved more than 100 people across Spain, Portugal, Italy and Malta.
The joint operation by the Policia Nacional and Tax Agency was coordinated by the European Public Prosecutor’s Office.
Twelve properties were searched across Malaga and Valencia, while another person was formally placed under investigation but not detained.
Spanish authorities estimate that the organisation has defrauded the country’s Treasury of approximately €70million in VAT since 2018.
That figure does not include additional losses allegedly caused in other European countries.
Investigators believe the network involved more than 100 people operating in Spain, Italy, Portugal and Malta.
How the alleged fraud worked
The organisation allegedly used a system known as ‘carousel fraud’, involving chains of companies trading products between different EU countries.
In this case, the operation centred on computer and technology products.
Goods were introduced into Spain before passing through a complicated chain of invoices and companies.
Some businesses charged VAT without paying it to the Treasury, while other companies within the network claimed deductions based on those unpaid tax charges.
Spanish companies also allegedly carried out intra-EU sales that enabled further VAT fraud in other member states.
The network reportedly relied on front companies, intermediaries and so-called ‘missing traders’ -businesses created or used to collect VAT before disappearing without paying the money to tax authorities.
Investigators said figureheads were also used to conceal the identities of those controlling the organisation.
Cash, gold and luxury watches seized
Officers seized €110,000 in cash during the Spanish searches, along with gold coins provisionally valued at more than €300,000.
Jewellery and luxury watches were also confiscated.
Authorities have frozen more than €7million in property, as well as numerous bank accounts and other financial products whose total value has yet to be determined.
Several vehicles have also been blocked from sale or transfer. The raids took place simultaneously in several European countries.
More than 300 properties were searched elsewhere in the EU and over 40 people were arrested in countries including Italy and Portugal.
Officers from the National Police’s Economic and Fiscal Crime Unit, known as UDEF, travelled to Italy to support local investigators during the raids.
One of the principal companies implicated in the Spanish investigation is based in Valencia and trades on an alternative Italian stock market. Its majority shareholders are reportedly Italian nationals.
Those arrested are being investigated for alleged offences against the Treasury, document forgery and money laundering.
