A joint operation by the Tax Agency and the Guardia Civil

• 22 people arrested and another 200 investigated, individuals and legal entities, in Spain and in several European countries for alleged tax crimes, money laundering and membership in a criminal organization
• Three storage facilities and ten homes have been searched, and more than 130,000 litres of modified diesel fuel, 1,800,000 euros in national and foreign bank accounts, 45,000 euros in cash, 14 trucks for distribution, three high-end vehicles, 19 mobile terminals, 12 computers and ten properties have been seized.
• The organization, directed from Eastern European countries and with leaders along the entire Mediterranean coast, was structured into independent cells so that some could continue to operate if others were detected, and had a large number of shell companies and front men.
• In addition to the damage caused by tax fraud, estimated at 50 million euros, the actions of the scheme caused harm to the end consumer and unfair competition in the hydrocarbon sector.

June 11, 2021 .- The Tax Agency and the Civil Guard have completed an extensive investigation, under the name of operation Casinos-Brulajo, developed for more than a year that has allowed the dismantling of a complex tax fraud organization in the hydrocarbon sector with the capacity to distribute modified diesel fuel throughout the national territory. So far, 22 people of Spanish, Polish, Ukrainian, Georgian and Algerian nationality have been arrested. Another 200 individuals and legal entities have also been investigated in Spain and in several European countries for alleged tax crimes, money laundering and membership in a criminal organisation.

The plot had a complete distribution chain, which included supplies from Eastern Europe, storage in Spain, transport companies and the final distribution network to the consumer. Led from Eastern European countries and with leaders located along the entire Mediterranean coast, the organization was structured into independent cells so that some could continue to operate if others were detected.

During the exploitation phase of the operation, which was carried out last week, four 'gas stations' were registered, three in Valencia, specifically in the towns of Xativa, Paterna and Silla, and another in Murcia, all of them clandestine, which were dismantled after the operation. More than 130,000 litres of modified diesel fuel, 1.8 million euros in national and foreign bank accounts, 45,000 euros in cash, 14 distribution trucks, three high-end vehicles, 19 mobile terminals, 12 computers and ten properties were seized.

Organization with front men and shell companies

The investigation was based on actions carried out by the National Customs Inspection and Investigation Office and the Investigation Team of the Regional Customs and Excise Department of the Tax Agency in Valencia.

From that moment on, the 9th Court of Instruction of Valencia takes over the police investigation with the opening of preliminary proceedings, following the complaint filed by the Provincial Prosecutor's Office for Economic Crimes of Valencia, with the assistance of the Tax Agency and the participation as judicial police of both the Customs Surveillance of the Tax Agency and the Civil Guard.

Investigators discovered that the criminal organisation was acquiring hydrocarbons for the automotive industry in various countries of the European Union, their technical composition modified to avoid EU tax controls, and finally selling them at service stations known as 'white label' or 'low cost'. In total, more than 30 of these gas stations have been located throughout the province of Valencia that were supplied by this organization.

The tax benefit of this activity was twofold: On the one hand, the non-payment of the Special Tax on Hydrocarbons, due to the adulteration of the product; on the other, the lack of VAT income to the public treasury that was passed on to their clients.

All of this was carried out through a business structure that included a large number of shell companies and front men. The network also had different storage and distribution centres throughout Spain. The investigation has identified ten clandestine 'gas stations' that distributed the product throughout Spain.

In addition to the damage caused by tax fraud, estimated at 50 million euros, the actions of the scheme caused harm to free competition and defrauded the end consumer. The sales prices of the product were significantly lower than the market price, making it extremely difficult for other service stations to compete, which were already being affected by the drop in activity resulting from the pandemic.

A harmful product for engines

As regards consumer fraud, due to its composition this hydrocarbon escaped Community controls before its arrival in Spain and, therefore, lacked quality guarantees, meaning that its continued use in vehicles could cause significant damage to engines. The modified hydrocarbon that the network introduced from Eastern countries violated Spanish tax and industrial regulations.

This modified hydrocarbon was initially received at the organization's facilities, and from there it was distributed to non-flagshipped service stations by national hydrocarbon transporters, precisely to separate - and thereby hide - the relationship between the foreign trucks that brought the product to Spain and the 'low cost' service stations that sold it to the final consumer. For this same reason, the organization had established an extensive network of front companies and distribution centers to conceal the illicit origin of the product.

80 officials from the Tax Agency and agents from the Civil Guard in the Valencian Community participated in last week's operational deployment, including personnel from the Tax Agency's Customs Surveillance Service, the Property Crimes Group of the UOPJ of the Civil Guard, Inspectors and Tax Technicians from the Investigation Team of the Regional Customs and Excise Department of the AEAT in Valencia, Patrols from the Tax and Border Service and Citizen Security of the Civil Guard, as well as Computer Support Units from the AEAT itself.

The cooperation of Eurojust in the execution of various seizures of bank accounts abroad has also been essential.

The operation is still ongoing and new operational actions are not ruled out following the analysis of the documentation and computer files seized.