Operation ‘Familia’

 

• The operation resulted in 13 arrests and as many searches that have allowed abundant evidentiary documentation to be obtained, as well as the blocking of 140 bank accounts and the seizure of cash. 
• The organization defrauded 5 million euros between 2011 and early 2013 through a complex structure of companies in Spain, Portugal, Cyprus and other European countries. 
• One of the ringleaders of the plot used up to three fictitious identities that he hid even from his own front men.  

July 8, 2013.- The Tax Agency has dismantled a criminal organization that, through a complex international network of instrumental companies managed by front men, had defrauded 5 million euros between 2011 and the beginning of 2013. Within the framework of the operation called 'Family', completed on June 25 in Tomelloso (Ciudad Real), 13 people have been arrested. Among them are the main participants, other accomplices and front men who collaborated in the creation of the plot of instrumental companies within Spain and abroad through which the fraud was channeled. 

13 home searches have also been carried out in the provinces of Ciudad Real (6), Guadalajara (2) and Madrid (5), which have made it possible to seize abundant paper and computer documentation on the fraudulent operations detected and whose analysis will allow adding elements of evidence. to those already obtained in the judicial investigation carried out to date. 

Likewise, precautionary measures have been adopted to block 140 bank accounts of those allegedly involved in the plot and of the instrumental companies used, in addition to having seized cash during the searches in the amount of 45,000 euros.  

Operation 'Family' begins with the tax investigation initiated by the Special Delegation of the Tax Agency in Castilla La Mancha in relation to one of the companies used by the organization. As a result of this investigation, well-founded indications were obtained that the company was a mere instrument within a complex fraudulent business structure with a presence in Spain, Portugal, Cyprus and other European countries. 

The Tax Agency filed a complaint, with the support of the Ciudad Real Prosecutor's Office in the development of the investigation directed by the Investigative Court number 3 of Tomelloso (Ciudad Real), and with the participation of Customs Surveillance in its police function. judicial, in close collaboration with the assistance of the Agency's Tax Inspection. 

'Modus operandi' 

To carry out the fraudulent activity, which was concentrated in the electronics sector, the products were invoiced by the suppliers to “remote trout” companies, instrumental companies created in Portugal and other European countries, while the merchandise was actually transported directly to Spain. The European instrumental companies were limited to re-invoicing Spanish instrumental companies (“truchas”), which did not really receive the goods either and which, in turn, re-invoiced, but this time to real distribution companies. The Spanish “trouts” charged VAT on their deliveries of merchandise within Spain to real distributors, but they did not pay that VAT into the Public Treasury. 

Given that, in accordance with community VAT regulations, it is not necessary to pay this indirect tax on intra-community purchases, but it is on sales in Spain, Spanish "trouts" would have to pay very high amounts of VAT, as they do not bear this tax on its acquisitions from European special purpose companies and will pass it on to its sales to distributors in Spain. However, to falsify the VAT circuit, the plot simulated in the tax returns some amounts of input VAT that were fictitious. 

The organization has developed several irregular activities, in addition to the main one (electronics sector), among which was the marketing of top brand tires, motorcycle accessories, gym equipment, telephone services, etc. In these cases, the plot, again through "trick" companies, falsified deliveries of merchandise from Spain to Portugal exempt from VAT, when, in reality, the products were distributed directly in Spain, billed at a low price thanks to the lack of VAT income in the Public Treasury. 

The companies that acquired these products from the “trout” subsequently deducted that VAT not paid, benefiting from the low prices at which they could acquire them due to the margin granted by VAT fraud. This behavior was threatening the rest of the companies in the sector, which could not compete with such prices. 

Hidden identities 

One of the alleged organizers of the plot hid his true identity to avoid being held responsible under three fictitious identities before third parties, and even before the front men he used. 

Of the people arrested and brought to justice, for two of them (PVJZ and VBSM) the investigating judge has decreed provisional imprisonment without bail for an indefinite period, while the others have been released with charges.  Currently the operation is ongoing and new arrests are not ruled out. 

More than 50 Customs Inspection and Surveillance officials from the Regional Units of Castilla-La Mancha, Madrid, the National Fraud Investigation Office (ONIF) and the General Subdirectorate of Operations of the Tax Agency have participated in the Family operation. 

An international problem  

This type of intra-community fraud is not a problem exclusive to Spain, but rather extends to all the countries of the European Union, having reached a worrying level in recent years, both due to the significant loss of tax revenue it causes, and because the price distortion that it introduces in the markets of the affected economic sectors, to the benefit of fraudulent operators and harming legitimate merchants who comply with their tax obligations. 

This situation has determined that, for years, the community authorities have paid special attention to the so-called intra-community “carousel fraud”, adopting initiatives to promote administrative cooperation between Member States and increase the effectiveness of national VAT control systems. The Spanish Tax Agency, a pioneer in various aspects of the prevention, detection and fight against this specific fraud, has been working in this line for years with specialized investigation bodies and the result is operations like the one now carried out.