European Public Prosecutor's Office ordered Marbella searches under international investigation

Four ringleaders were allegedly involved in committing the biggest carousel fraud in the EU

DAVID LERMA

Wednesday, 30 November 2022, 12:31

The entry and search of the fourth floor of the Alfil building in Marbella, the headquarters of Antonio Flores Vila's law firm, was at the request of the European Public Prosecutor's Office, SUR has learnt. At 8am on Tuesday, a large number of Guardia Civil officers searched the building in the centre of the town. The search lasted three hours and they left without, apparently, taking any physical documentation.

The inspection was authorised by an entry and search warrant issued on Monday, which SUR has had access to. The Guardia Civil action was carried out as part of an investigation into tax fraud, money laundering and membership of a criminal organisation. It directly targets four people, three men and a woman, who are alleged to be the ringleaders of the largest 'carousel fraud' (the evasion of VAT, IVA - or national sales tax equivalent - by organised crime groups) committed in Europe.

More raids

Guardia Civil searches were also carried out on a company located in Calle Pizarra, a home in the La Alcazaba residential developement in Río Verde, and a villa in Nagüeles. The force also searched another legal firm in Malaga. At the same time, the operation was deployed in Madrid, Barcelona and Ceuta.

According to the European Public Prosecutor's Office (EPPO), "There are reasonable grounds to believe that the cell under investigation for committing PIF crimes (affecting the economic interests of the EU) may be a criminal organisation," and, allegedly, involves Portuguese and French nationals.

Since 2017 the main suspects have allegedly created "a successive chain of companies engaged in the business of selling computer equipment on online platforms to avoid paying the VAT due on the sale of the goods to the final customers with the falsification of tax documents/declarations," EPPO said.

The suspects also, allegedly, provided bank accounts to a number of entities to move the money obtained through the alleged criminal activity to use it for the purchase of personal items, real estate and valuable assets.

Portuguese mobiles

According to the court order, the operation began with a Portuguese company involved in trading mobiles, tablets and electronic devices, which had other supplier companies located in Germany and Austria. The following year, the main company under investigation declared to the Portuguese tax authorities that it had paid invoices to its suppliers amounting to 200 million euros. It also claimed that it had sold its products to a well-known US online trading corporation, which was based in Luxembourg. However, investigators concluded that "the invoices submitted to the tax authorities were allegedly falsified".

Another of the companies involved, which was active between 2016 and December 2018, also declared extra-EU purchases amounting to €40 million and declared intra-EU sales to international companies. According to the EPPO, between the first Portuguese company and the second one, the suspects would have managed to evade in Germany "more than 52 million euros in VAT between 2016 and 2018, considering only German VAT receipts".

Debit cards

Two of the alleged leaders of the scheme, according to the indictment, "used money" from two of the main companies involved in the fraud for their own benefit. To cover up their crime, they would have used prepaid and debit cards "charged with money from these banking sources", which would also be used to pay frontmen.

Lawyer responds

Antonio Flores, head lawyer of Lawbird, the law firm searched in Marbella, has spoken exclusively to SUR and exempts himself from any responsibility in the alleged fraud.

"We have many Moroccan clients, but they have certain restrictions to withdraw money and cannot make transfers freely. What do they do? They use companies in Europe that trade with Morocco to send money to Spain from Casablanca. I don't think it's correct from Morocco's point of view. From time to time they get fines. That's none of Spain's business. Some of these companies, which are part of a network of front companies, have carried out the service, for a fee.

“In my case, it is a man who has bought a private house for his daughter in Madrid and another one in Dama de Noche (Marbella). They have received the money in our client account. Through us, they have bought their house. So far, so good.

“What happens is that this company has used this transfer to say that it is a deductible expense for goods that we have sold them. What do they get out of it? If I receive 500,000 euros, they say, I think I remember, that they have sold me dog food for that amount and they deduct the VAT. I think in this way, for example, they have applied for 120,000 euros from the Portuguese tax authorities. It's a merry-go-round, the money circulates.

"In our case there are three Moroccan families, who sent the money to buy a house. But they don't know anything. In Spain there is nothing, we have only received a request from the European Public Prosecutor's Office in Portugal for an investigation. It is not laundered money, it is VAT fraud for that amount that has been sent," Flores said.

According to Flores, "They already asked us in 2020. Are you selling anything, they asked us. Only legal services here, VAT zero. It appears in the court document. We deal with buying and selling, investments and litigation. There are no measures against the people or the assets of the office. They have taken the documents of the three clients. This is VAT fraud at a European level," Flores added.

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