49 arrested in €17 million luxury car scam in Spain

A sophisticated criminal network specializing in luxury car fraud in Spain has been successfully dismantled in a coordinated operation led by the European Public Prosecutor's Office. On Wednesday, September 27th, Spanish authorities, including the National Police, the Guardia Civil, and the Tax Agency, arrested a total of forty-nine people, putting an end to an elaborate scheme that orchestrated an IVA (VAT) fraud amounting to a staggering 17 million euros.

The criminal network, with connections spanning from Germany to Portugal, allegedly manipulated intricate evasion systems to orchestrate the fraud. Their operation involved the manipulation of the Special Regime for Used Goods and the creation of fictitious companies to disguise transactions, taking advantage of EU regulations concerning cross-border trade.

In a series of carefully coordinated actions, law enforcement agents carried out 14 searches across multiple provinces, including Madrid, Badajoz, Leon, Vizcaya, Navarra, Granada, Caceres, Almeria, Teruel, Toledo, and Cantabria. As a result of the crackdown, authorities seized four luxury cars and vital documents. Additionally, they confiscated 84 vehicles and 55 bank accounts containing over €500,000.

The investigation, which began in early 2021, uncovered three instances of VAT fraud committed between 2019 and 2021. The criminals utilized two intricate strategies to evade detection and manipulate transactions. Luxury cars imported into Spain were destined for sale to dealerships across the country, while others were used to supply criminal organizations involved in drug trafficking with high-end sports cars.

A comprehensive analysis of the banking activities of more than 200 companies revealed transactions exceeding €661 million, with funds primarily flowing from Spain to the network's 24 companies in Portugal, and subsequently to the German suppliers of the vehicles.

In addition to the arrests, authorities confiscated assets valued at more than €240,000. Many of the luxury vehicles were either registered under front companies or utilized in the transportation of narcotics, further complicating the criminal network's activities.

This successful operation has exposed the intricate web of transnational VAT fraud within the luxury car market, shedding light on its connections to drug trafficking and the movement of substantial capital across international borders. The collaborative efforts of various law enforcement agencies have proven instrumental in dismantling this elaborate criminal scheme.