Operation by the AEAT and Civil Guard, led by the European Public Prosecutor's Office

• Eight members of this organization have been arrested in 19 raids and searches carried out in Madrid, Barcelona, La Coruña, Ibiza, Jerez de la Frontera and Valencia.

• During the exploitation phase of this operation, nearly 400,000 euros in cash, more than 1 million euros in bank accounts, a yacht, 34 luxury watches, five high-end vehicles, as well as the request for seizure of 21 properties were seized.

July 10, 2025.- The Tax Agency and the Civil Guard, in the so-called "Gallagher" operation led by the European Public Prosecutor's Office, have dismantled a major criminal organization specializing in massive fraud in the alcoholic beverage sector. Between the fiscal years 2018 and 2024 alone, they are held responsible for fraud totaling nearly €69 million by evading payment of VAT on commercial transactions.

Business network of 93 companies from different countries

The now-dismantled criminal organization, with strong international ties, had specialized for years in perfecting crimes against the financial interests of the European Union and the Public Treasury, operating in the alcoholic beverages market through a corporate structure made up of 93 Spanish, Portuguese, German, Maltese, and Turks and Caicos Islands companies. This also included a parallel corporate structure through which criminal funds were channeled and subjected to money laundering procedures.

Bonded warehouses in the Netherlands, Portugal and Spain

This investigation has focused on possible intra-EU VAT fraud, exploiting EU rules on cross-border transactions between Member States, exempt from VAT, as well as the subsequent laundering of the profits obtained. The Regional Inspection Area of the AEAT in Valencia reported this scheme to the European Public Prosecutor's Office in 2023.

The fraudulent operation was carried out with the participation of tax warehouses located mainly in the Netherlands, Portugal, and Spain.

Investigators have been able to corroborate the importation of large quantities of alcohol from bonded warehouses in several Member States to a bonded warehouse in Spain, where the alcohol is imported with tax suspension, in accordance with European legislation.

 

The tax would be accrued only when the products leave the bonded warehouse for commercial or consumer distribution. Once there, fictitious intermediaries, "missing traders," based in Spain and controlled by the organization under investigation, acquire the alcohol, pay the VAT, and then disappear without fulfilling their tax obligations.

The alcohol is then sold through a network of shell companies, backed by fake invoices, in order to conceal the entire fraudulent chain. Finally, the product is distributed in Spain through distributors controlled by the criminal network, whose corresponding VAT , apparently correctly reflected on the invoice, has never actually been collected. The failure to pay VAT allowed for illegal price cuts, resulting in unfair competition.

Three Spanish citizens at the top of the criminal organization

The leaders of the criminal organization, led by three Spanish citizens, allegedly relied on a network of front men at the head of numerous shell companies, which allowed them to seemingly separate themselves from commercial activity, hinder product traceability, and place criminal liability arising from their criminal activity on these companies.

The investigation was conducted by the Tax Agency through the National Fraud Office (ONIF), together with the Central Operational Unit of the Civil Guard, through its Economic Investigation and Anti-Corruption Department, all under the direction of the European Public Prosecutor's Office (EPPO).

The EPPO is the European Union's independent prosecutor's office responsible for investigating, prosecuting and bringing to justice crimes against the EU's financial interests.

The operations were supported by the regional inspection departments of Valencia, Catalonia, Andalusia, Galicia, and Madrid, as well as IT personnel from the central and regional IT audit units (UCAI and UAI) of the Tax Agency, and by various units from the Civil Guard Zones of Madrid, Catalonia, the Balearic Islands, and Navarre, command posts in Barcelona, Lérida, Cádiz, La Coruña, and Valencia, as well as the Canine Service and the Air Service of the Civil Guard.