A joint operation by the Tax Agency and the Guardia Civil

• 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 carried out in Albacete, Valencia, Pontevedra and Almería, where 15 vehicles valued at one and a half million euros were seized.
• The organization, in connivance with some clients who ended up purchasing vehicles at a lower cost thanks to 'VAT laundering', used foreign fictitious companies and front men to make their detection difficult. 

May 5, 2021.- The Tax Agency, in a joint operation with the Civil Guard, has dismantled a criminal organization that used a network of fictitious shell companies located in Portugal to introduce vehicles into Spain from Germany. Once in our country, the plot sold the vehicles through distribution companies without paying the corresponding 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 payments.

Eight people have been arrested in the context of the operation, called 'term-drosipán', including the ringleader of the organisation, as well as other persons in charge and organisers of the scheme, accomplices and beneficiaries of the fraud.

Similarly, six house searches have been carried out in the towns of Albacete, Bellreguard (Valencia), Vilagarcía de Arousa (Pontevedra) and Almería, which have led to the seizure of 15 vehicles valued at one and a half million euros, as well as a large amount of paper and computer documentation on the fraudulent operations detected, the analysis of which will allow evidence to be added to that already obtained in the judicial investigation to date.

Precautionary measures have also been adopted, blocking the bank accounts of the companies involved in the fraud scheme.

The origin of the research

The investigation, carried out by the Court of Instruction number 2 of Albacete, was initiated following a complaint filed by the Regional Inspection Unit of the Tax Agency in Castilla-La Mancha following a prior investigation procedure that it had carried out on the companies involved in the plot.

From that moment on, the Albacete Public Prosecutor's Office is promoting the judicial investigation, which is carried out jointly by the Customs Surveillance of the Tax Agency and the Civil Guard, in its role as judicial police, in close collaboration with the assistance of the Inspection Area of the AEAT in Castilla La-Mancha.

Thanks to the actions carried out by investigators, a number of suspicious registrations were detected.

Fraud Methodology: 'introductory trout'

The fraud used by the plot began with a series of Spanish shell companies, known as 'introducing trout'. These companies simulated direct purchases from European suppliers of used vehicles that were already registered in the country of origin. As these were intra-community acquisitions of goods under the general VAT regime, Spanish companies obtained vehicles exempt from VAT.

Subsequently, these 'introducing trout' sold the vehicles to Spanish distributors in the same network, but they did not pay the VAT to the public treasury, which does correspond as it is already an internal operation. On the other hand, the tax appeared on the sales invoices to the distributors, who did deduct the VAT not paid on the 'trout'. 

With this operation, the organization could sell the vehicles to distributors at a much lower price, thanks to the margin provided by prior VAT fraud. To make detection more difficult, the scheme periodically replaced the companies that generated the fraud with new ones.

At the same time, and under the guise of independent entities, the directors of the distributors actually controlled the 'truchas', which simply formally channelled the purchases of used vehicles to suppliers in the European Union.

According to the investigations, some clients of the distribution companies were fully aware of the fraud and acted in full connivance and coordination, formally ordering the purchase of vehicles through the scheme to benefit from 'VAT laundering'.

Once the purchase was ordered, 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 registration controls.

Interposition of foreign shell companies and front men

As a way of reinforcing the concealment of the fraud, the scheme also had a 'layer' of foreign shell companies (known as 'remote shells'). The function of these companies within the fraudulent scheme was to modify the applicable VAT regime.

These 'remote trouts', which were also controlled by the directors of the distributors, received invoices under the ordinary VAT regime for exempt intra-community deliveries of goods. Next, they improperly changed the tax regime, issuing invoices to the Spanish distributors of the scheme in accordance with the Special Regime for Used Goods (REBU), which is legally incompatible and already allowed customers to be maintained throughout the distribution chain. special regime that implies a much lower VAT taxation than in the general regime.

Investigators were able to detect an additional method of concealment through the use of individuals with a clear profile as front men. These people, who are sometimes difficult to locate and fail to comply with their tax obligations, played a role similar to that of the 'remote trouts'.

A European problem

VAT fraud in intra-community operations in different sectors, a common problem in the different EU member countries, has the double relevance of the loss of tax revenue it causes and the serious price distortion it introduces in the markets of the sectors. affected economic sectors, to the benefit of fraudulent operators and seriously harming legitimate merchants, 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 'missing trader fraud' or 'missing trader fraud', by adopting initiatives that reinforce this fights with increasing administrative cooperation between Member States and increasing the effectiveness of national VAT control systems.

The Spanish Tax Agency, a pioneer in various aspects of prevention, detection and combating this specific fraud, has been working in this direction for years with specialized investigative bodies and the operation developed is part of these efforts.

The Tax Agency has also carried out the operation with the participation of the Customs Surveillance Operational Units in Albacete, Quintanar de la Orden and Pontevedra; Inspection Units of Albacete, Galicia, Valencia and Almeria; and IT Audit Units of Castilla La Mancha, Almería, Galicia and Valencia. The Traffic Investigation and Analysis Group of the Traffic Division Headquarters (GIAT Central) participated on behalf of the Civil Guard.

Currently the operation is ongoing, and new judicial decisions may be adopted.