A combined operation of the Tax Agency and the Guardia Civil

• The organization, based in Seville, sold huge quantities of hydrocarbons at a price below the market value throughout the national territory.

• It included a bank employee in its structure who facilitated the opening of bank accounts in the name of front men, from which the profits obtained from tax evasion were diverted.

• More than 46 people have been arrested and 30 legal entities have been investigated in an operation that has resulted in the blocking of 100 bank accounts and the seizure of 25 properties, three boats and six high-end vehicles.

July 19, 2024.- The Tax Agency and the Civil Guard, within the framework of a joint operation, have dismantled a criminal organization that is believed to have defrauded more than 100 million euros in the sale of hydrocarbons. The organisation, based in Seville, sold huge quantities of product at a price below the market price throughout Spain and had a bank employee who facilitated the opening of accounts in the name of front men to divert profits. The operation has resulted in 46 arrests, 30 companies under investigation, the freezing of 100 bank accounts and the seizure of 25 properties, three boats and six high-end vehicles.

The operation, called "Memorable", begins in 2023, after becoming aware of a series of corporations in the hydrocarbon sector with registered offices in Seville that, after the corresponding commercialization of hydrocarbons, would be defrauding large amounts of money as a result of not paying the corresponding VAT.

The investigation of the case has included the participation of the Economic Crime Team of the Organic Unit of the Judicial Police of the Civil Guard of Seville and the Regional Inspection of the Tax Agency in Andalusia, which has collaborated in this joint operation for the alleged commission of tax crimes.

Initial investigations confirmed the existence of a criminal organisation hidden behind the business network. For this reason, the monitoring of the activities of the group of people identified was intensified with the aim of gathering evidence to clarify the hidden network behind these companies.

After months of intense investigation, information from tax returns and intelligence obtained from monitoring the activities of the main suspects, clues were obtained that revealed the existence of a criminal organization led by a family clan based in Seville. This clan, supported by the rest of the group members, created corporate structures for each of the different fiscal years and used them to commit fraud.

Front men and changes in schemes to conceal fraud

The "modus operandi" used by the organization's top brass was always repeated over time. The organization benefited from the regulatory loopholes that regulate the marketing of hydrocarbons, creating corporate structures with the use of front men who acted as administrators of the companies in each of the fiscal years investigated from 2019 to 2023.

The design of the corporate structures, carried out by the top of the organization, was increasingly better designed. The aim was to make both the inspection work and the investigation more difficult. The schemes created to perpetrate the fraud were constantly changing and had a very limited lifespan, not extending beyond one year (a fiscal year).

The corporate structures covered almost the entire national territory, which allowed the organization to supply hydrocarbons to small merchants in different parts of the peninsula. The main offices from which sales were managed were located in Barcelona and Jerez de la Frontera.

A bank employee caught

Another pillar of the organization was a bank employee who had been recruited by the leaders of the organization to open bank accounts in the name of front men from which the profits obtained from tax evasion were diverted.

This bank employee also provided advice to the organization's top management on financing possibilities, existing funds, the convenience of opening fraudulent accounts in different companies and financing possibilities to bypass the alerts of the money laundering prevention system.

The organization's criminal activity increased exponentially during the final months of the investigation. The main reason was that the entry into force of Royal Decree Law 8/2023, which prohibits sales between retail fuel distributors, was approaching, which required a restructuring of the 'modus operandi' used by the organization in recent years.

This tax evasion not only brought them huge profits, but also allowed them to offer very low market prices, competing unfairly with the rest of the legal operators in the sector, so that they cornered a large part of the market.

Laundering of profits obtained

The organization laundered part of the profits by investing in cryptocurrencies and acquiring companies in the health and hotel sectors, restaurants and yacht clubs.

The people involved in the scheme also diversified part of the profits from tax fraud, which they used to finance part of the assets they used (houses, high-end vehicles, luxury trips and jewellery).

The judicial procedure is still in the investigation phase, with part of the quantification of the tax fraud committed still pending. The fraud has so far exceeded 100 million euros since 2019.

Records and effects seized

Following the initial investigation phase, on February 19, the investigating court agreed to carry out 16 raids and searches in the homes and offices of some of the members of the organization, distributed in Seville (8), Algeciras (1), Jerez de la Frontera (1), Malaga (2), Marbella (1), Granada (1), Barcelona (1) and Tarragona (1).

On the same day, and in order to ensure that part of the tax debt incurred is paid, the investigating court agreed to the preventive annotation of the seizure of 25 properties, the impoundment of three vessels and the freezing of more than 100 bank accounts out of the more than 500 analysed, with the total blocked balance being approximately nine million euros. More than 300,000 euros in cash and six high-end vehicles were also seized during the searches.

Following the completion of the investigation and during various stages of the investigation, more than 46 individuals have been arrested and more than 30 legal entities are under investigation. Operation Memorable is still ongoing and new arrests are not ruled out.