Joint operation between the Tax Agency and the Civil Guard

• 75 medium and high-end vehicles were blocked, as well as 44 bank accounts, and 17 properties, seven luxury watches, computers, mobile phones and abundant documentation in physical and digital format were seized.
• The valuation of the seized and confiscated assets covers a large part of the more than 14 million euros estimated to date as the amounts defrauded by the organization.
• 23 people of Spanish and Romanian nationality have been arrested, and three dealerships open to the public, three warehouses used to store vehicles and two homes have been searched.
• This is the first VAT scheme operation directed and coordinated by the European Public Prosecutor's Office

December 29, 2022 .- The Tax Agency and the Civil Guard, within the framework of a joint operation directed and coordinated by the European Public Prosecutor's Office, have dismantled an intra-community VAT fraud scheme filed in Valencia that operated in the automobile sector.

As a result of the actions, 23 people have been arrested, 75 vehicles and 44 bank accounts have been blocked, and 17 properties have been seized, among other things that allow covering a good part of the more than 14 million euros that are estimated to have been defrauded by the organization to date.

The operation, called 'Cavallino', began last year 2021 when the National Fraud Investigation Office (ONIF) and the Regional Inspection Unit of the Tax Agency in Valencia, together with the Civil Guard, detected an organization located in Valencia that used a complex network of shell companies ('fake' companies) that, managed by front men, introduced the vehicles into Spain.

Previously, the organisation registered these shell companies in the Register of Intra-Community Operators and, through them, virtually acquired the vehicles from their sole Community supplier, located in Germany.

However, these transactions were a mere artifice, given that the vehicles were actually purchased directly from Germany by a series of reseller companies that, by doing so, were defrauding a significant portion of VAT that they would have been obliged to pay.

Arrests and searches

The complex investigation was completed between November and December of this year, when a total of 23 people of Spanish and Romanian nationality were arrested in various locations in Spain.

The arrest of the 23 people, including 18 men and 5 women of Spanish and Romanian nationality, took place in various locations in the province of Valencia: Valencia capital, Torrent, Bétera, Llíria, Pobla de Vallbona, Marines and Olocau. The detainees are accused of crimes against the Public Treasury, money laundering and membership in a criminal organization.

During the exploitation phase of the operation, the Civil Guard of Valencia and the Tax Agency proceeded to enter and search two homes, three dealerships open to the public and three warehouses that the organisation used for the storage and custody of the vehicles.

In addition to the arrests, the operation has resulted in the blocking of a total of 75 mid- and high-end vehicles valued at more than seven million euros – of which 18 were high-end vehicles, valued at two million euros. The accounts of 14 individuals and 30 companies with 1,350,000 euros have also been frozen and 17 properties with an estimated value of 3,000,000 euros, seven watches valued at more than 100,000 euros, six computers, six mobile phones and a large amount of documentation, both in physical and digital format, have been seized.

The investigation has been supported and cooperated by Europol, which has acted as a liaison body for the exchange of information with other countries of the European Union, especially with Germany.

This is the first VAT scheme operation directed and coordinated by the European Public Prosecutor's Office in Spain. The proceedings have been handed over to the European Prosecutor's Office in Spain and new arrests are not ruled out, once the review and analysis of the copious documentation seized has been completed.