€10 million fraud ring uncovered

Gang arrested for defrauding €10 million

Image of National police officer. Credit: PoliciaNacional/X

Law enforcement agencies in Malaga, Madrid and Zamora have uncovered a sophisticated fraud scheme totalling €10 million.

Details of the extensive fraud operation were brought to light on March 19, in which five individuals across Zamora, Malaga, and Madrid were arrested. They are now facing charges including fraud, of up to €10 million, obstruction of justice, money laundering, and being part of an organised crime group.

Elaborate scheme unravelled

The fraudsters cleverly established companies to simulate a burgeoning business operation. By engaging in cross-billing with other entities under investigation, they appeared to show a significant increase in business volume.

This manipulation allowed them to secure financing to bolster their share capital before intentionally filing for bankruptcy.

Tangled web of deceit

Their fraudulent activities extended to acquiring vehicles and electronic goods without intending to pay. These items were then sold off in countries like France and Portugal or on the black market.

The initial trigger for the investigation was multiple complaints from banks, vehicle financing firms, and electronics suppliers regarding unpaid loans and goods.

Exploitation and collapse

To maintain a facade of solvency, the group engaged in minor transactions that were promptly paid off to avoid suspicion. Their method involved inflating the value of properties to artificially increase the company’s worth.

Once they had secured larger loans and financing, they transferred ownership to unsuspecting individuals, including foreigners and those with disabilities or mental disorders, to evade legal repercussions.

The eventual declaration of bankruptcy was intentionally prepared so that accidental bankruptcies would have to be resolved by civil means.

Following the identification of those involved, arrests were made in Zamora, Mostoles, and Benalmadena. The case, currently being heard in a Madrid court, has also led to charges against an additional eight individuals.

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Written by

John Ensor

Originally from Doncaster, Yorkshire, John now lives in Galicia, Northern Spain with his wife Nina. He is passionate about news, music, cycling and animals.