EU-wide fuel oil and precious metals VAT fraud and money laundering network dismantled
On 14 December 2016 judicial authorities and law enforcement from Spain dismantled a criminal organization whose modus operandi involved defrauding states on the VAT from oil and precious metals via a sophisticated carousel fraud scheme, and the money laundering of these gains through, various corporate structures, resulting in the loss of more than EUR 25 million in the hydrocarbon sector since 2015.
The dismantled group responsible was based in Spain and Portugal and used a complex corporate architecture including shell companies, missing traders, and companies functioning as alternative payment platforms for the laundering of the ill-gotten gains.
The investigation into the criminal activities started in Spain a year ago, targeting a criminal network operating in the sector of fuel oils. The criminal organization, by undercutting market prices with their untaxed oils, harmed commercial activities in the sector with such unfair competition that other operators not involved in the VAT fraud were compelled to get out of the business.
The operation in Spain was led by the Central Investigative Court n. 5 and the Public Prosecutor’s Office of the National High Court in Madrid. During the action day the specialized Unit of the Spanish Guardia Civil against Organized Crime (UCO) under the supervision of the judicial authorities, operated on the whole national territory. Additionally several officers of the Guardia Civil travelled to Italy and Portugal to be present during the execution of the requested measures in those Member States.
In total 20 persons were arrested in Spain and 25 searches were carried out simultaneously in Spain, Portugal and Italy. Two persons were arrested in Portugal and 13 bank accounts were frozen in Portugal and Slovenia. Funds already frozen in Slovenia amounted to almost EUR 91 000.The simultaneous actions were coordinated on the international level by Eurojust.
Mr Jimenez-Villarejo, National Member for Spain at Eurojust and Chair of the Coordination Centre, said;
“Organized VAT fraud represents a significant risk to the economy of the EU, and, as such, Eurojust will continue to do all it can to aid in the transnational coordination of the precautionary and investigative measures adopted by our national judicial authorities in order to defeat cross-border financial crime. With this Coordination Centre Eurojust supported our home authorities in overcoming the absence of an international consensus on VAT fraud, which has been identified as the most relevant bottleneck obstruction in these types of investigations.”
- Figures at a glance
20 arrests and 21 house searches in Spain
2 arrests in Portugal
4 house searches abroad (3 in Italy and 1 in Portugal)
16 bank accounts frozen (14 in Portugal and 2 in Slovenia)
