Dismantled a criminal organization that defrauded seven million euros of VAT in the sector of the sale of used vehicles

Eight people have been arrested, including the leader of the organization, as well as other leaders and organizers of the plot, accomplices and beneficiaries

During the operation, six searches were made in Albacete, Valencia, Pontevedra and Almería, where 15 vehicles valued at one and a half million euros were intervened.

The organization, in collusion with some clients who ended up acquiring the vehicles at a lower cost thanks to the 'VAT laundering', used foreign shell companies and front men to make their detection difficult








The Civil Guard and the Tax Agency, within the framework of the DROSIPAN-TERMINO operation, have dismantled a criminal organization that used a network of fictitious instrumental companies located in Portugal to introduce vehicles into Spain from Germany. Once in our country, the plot sold the vehicles through distribution companies without the corresponding payment of taxes. With this mechanism, the organization would have introduced vehicles worth 35.3 million euros between 2017 and 2021, defrauding 7.3 million euros of VAT quotas.
As part of the operation, eight people have been arrested, including the head of the organization, as well as other leaders and organizers of the plot, accomplices and beneficiaries of the fraud.
Similarly, six home searches have been made in the towns of Albacete, Bellreguard (Valencia), Vilagarcía de Arousa (Pontevedra) and Almería, which have allowed the seizure of 15 vehicles valued at one and a half million euros and abundant documentation on paper and computerized information on the fraudulent operations detected and whose analysis will allow adding evidence to those already obtained in the judicial investigation so far.
At the same time, precautionary measures have been adopted with the blocking of bank accounts of the companies involved in the fraud scheme.

The origin of the investigation

The investigation began as a result of a complaint filed by the Regional Inspection Unit of the Tax Agency in Castilla-La Mancha after a previous investigation procedure that it had developed on the companies involved in the plot.
Thanks to the actions carried out by the investigators, a series of registrations that were suspicious were detected.

Methodology of the fraud "Introducer trout"

The fraud used by the plot started with a series of fictitious Spanish companies, known as ‘introductory trout’. These companies simulated the direct purchase from European suppliers of used vehicles that were already registered in the country of origin. As these are intra-community acquisitions of goods under the general VAT regime, Spanish companies obtained vehicles exempt from VAT.
Subsequently, these ‘introducer trout’ sold the vehicles to Spanish distributors of the same plot, but they did not pay the VAT to the Public Treasury, which does correspond to the fact that it is already an internal operation. On the other hand, the tax appeared on the sales invoices to the distributors, which did deduct the VAT not paid for the ‘trout’.
With this operation, the organization could sell the vehicles to the distributors at a much lower price, thanks to the margin granted by the previous VAT fraud. To make it difficult to detect, the plot was periodically replacing the companies that generated the fraud with new ones.
At the time, and under the guise of independent entities, the directors of the distributors actually controlled the "trout," which simply formally funneled the purchases of used vehicles to European Union suppliers.
According to the investigations, some clients of the distribution companies were fully aware of the fraud and acted in full collusion and coordination, ordering the purchase of vehicles formally through the plot to benefit from the "VAT laundering."
Once the acquisition was commissioned, the registration of the used vehicle in Spain was processed before the corresponding Provincial Traffic Headquarters, after passing through the Technical Inspection of Vehicles, providing the documentation of the simulated transaction to justify the ownership of the registrant. Sometimes, the plot even altered the documentation to try to avoid controls on the registration.

Filing of foreign shell companies and front men

As a way to reinforce the concealment of the fraud, the plot also had a "layer" of foreign shell companies (called "remote trout"). The function of these companies within the fraudulent scheme was to modify the applicable VAT regime.
These ‘remote trout’, which were also controlled by the directors of the distributors, received invoices under the ordinary VAT regime for exempt intra-community deliveries of goods. Subsequently, they unduly changed the tax regime, issuing invoices to the Spanish distributors of the plot in accordance with the Special Regime for Used Goods (REBU), which is legally incompatible and already allowed this to be maintained throughout the distribution chain to customers. special regime that implies a much lower VAT taxation than in the general regime.
The researchers came to detect an additional concealment formula by interposing individuals with a clear profile of front men. These people, who are sometimes difficult to locate and in breach of their tax obligations, played a role similar to that of the ‘remote trout’.

A European problem

VAT fraud in intra-community transactions in different sectors, a common problem in the different EU member countries, has the double relevance of the loss of tax revenue that it causes and of the serious price distortion that it introduces in the markets of the sectors economic affected, for the benefit of fraudulent operators and seriously harming legitimate traders, who comply with their tax obligations.
This situation has determined that the community authorities, for years, have paid special attention to the so-called intra-community carousel fraud, also called chain fraud of the missing operator or 'missing trader fraud', by adopting initiatives that reinforce this fight with an increase administrative cooperation between Member States and increasing the effectiveness of national VAT control systems.
The Civil Guard, like the Spanish Tax Agency, has been working in this line for years with specialized investigation bodies for the prevention, detection and fight against this specific fraud.
The Civil Guard has intervened in the operation, on the part of the Civil Guard, the Traffic Investigation and Analysis Group of the Headquarters of the Traffic Group (GIAT Central) and on the part of the Tax Agency, the Customs Surveillance Operative Units in Albacete, Quintanar de the Order and Pontevedra; Inspection Units of Albacete, Galicia, Valencia and Almería; and Computer Audit Units of Castilla La Mancha, Almería, Galicia and Valencia.
The operation has been directed by the Court of Instruction number 2 of Albacete.
The operation is currently ongoing and new court decisions can be taken.

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