A joint operation by the Tax Agency and the Guardia Civil

• The plot focused on the non-payment of VAT on the wholesale sale of the product through instrumental companies and front men.

• 21 arrests have been made and 61 high-end vehicles, two boats, and two million liters of product have been seized, and more than 300 bank accounts have been blocked, out of more than 1,000 analyzed.

• It is considered the biggest blow to organized crime associated with this energy sector.

April 4, 2019 .- The Tax Agency and the Civil Guard, within the so-called 'Drake' operation, have dismantled two alleged criminal organizations that carried out their criminal activities in the hydrocarbon sector, mainly by fraudulently marketing high quantities of product wholesale, and that would have defrauded more than 150 million euros. The operation was carried out in the provinces of Castellón, Valencia, Lleida, Girona and Madrid.

The way these alleged criminal groups proceeded basically consisted of the interposition of instrumental companies and front men, controlled by those responsible for them, through which they defrauded VAT in million-dollar amounts; Specifically, this operation would have revealed an estimated fraud of more than 150 million euros.

These instrumental entities appropriated the VAT quotas passed on to their clients in the marketing of gasoline and diesel fuel, mainly through the use of different tax evasion mechanisms.

Tax evasion and money laundering

The mechanisms used include the use of false invoicing to reduce the amount to be paid, the declaration of a lower sales volume than the real one and the filing of declarations without income. The fraud was completed by the depletion of the assets of the entities that were supposed to pay the tax.

This criminal operation, in addition to generating multi-million-dollar fraud, distorts the sector, driving out legitimate operators who cannot compete with the prices set by companies that avoid paying the corresponding taxes. In turn, these companies act in a concerted manner following instructions from criminal management, extending their criminal activity and, consequently, systematically cornering a larger market share.

This way of acting ensures the sale of all the product that can be purchased on the national and international market, billing billions of euros in a single year, given that the positioning in the market was consolidated, precisely, by the permanent capacity to improve prices in relation to the competition as a whole.

In turn, high profits were generated that were allegedly laundered by the criminal organisations themselves through corporate structures used for this purpose, ultimately investing them in real estate or positioning them in third countries. This operation has also been the subject of this investigation, with the aim of identifying all the assets derived from the fraudulent activity, and thus surrounding these two criminal organisations, making it impossible for them to reproduce.

Operation Drake in figures

In addition to the more than 150 million euros of fraud detected, 21 people have been arrested in this operation, for which a total of 292 companies and 150 individuals have been investigated, analysing 1,085 bank accounts and proceeding to the search of 22 addresses. 61 high-end vehicles, two boats and two million litres of product have also been seized, and 347 bank accounts and 155 properties have been blocked.

Fraud in this sector is particularly relevant, precisely in this marketing segment. The Tax Agency and the Civil Guard have been intensively investigating these criminal schemes since 2010, bringing to light hundreds of millions in fraud.

This joint operation between the Tax Agency and the Civil Guard represents the biggest blow ever dealt to organised crime associated with the hydrocarbon sector due to its impact and positioning in the market, with these two dismantled criminal organisations being the most important ones that have been active in recent years.

The investigation was conducted by the National Fraud Investigation Office (ONIF) of the Tax Agency and the Regional Inspection Unit of the Tax Agency in Madrid and by the Central Operational Unit (UCO) of the Civil Guard, under the direction of the Central Court of Instruction No. 4 and the Court of Instruction No. 5 of Getafe (Madrid).

50 officials from the ONIF and the Regional Inspection Units of the Tax Agency in Madrid, Valencia and Catalonia participated in the operation established for the exploitation of Operation Drake, in addition to members of the Central Operational Unit, various intervention units of the Civil Guard such as the Canine Service, USECIC Madrid and investigation and citizen security units of the Civil Guard commands of Lérida, Madrid, Gerona, Castellón and Valencia.

Filming of records within the framework of Operation 'Drake' (to download the video, enter the following web address):

https://we.tl/t-XDWICUhc3W