Ten arrested after 12-million-euro fuel tax scam network led by ringleader in Malaga is busted

Operation Capibara, led by the National Police and Spain's Hacienda tax authority, has resulted in the dismantling of a criminal organisation that allegedly defrauded more than 12 million euros in fuel tax in 2022 and 2023.

The network was headed by the main suspect, based in Malaga, who would collaborate with a group of people, including financiers and front men. A total of ten people in the provinces of Malaga, Almeria, Cordoba, Vizcaya and Asturias have been arrested on suspicion of crimes against the tax authorities and membership of a criminal organisation.

Operation Capibara was launched at the beginning of the year, combining tax, police and financial information. It was discovered that behind this million-euro fraud was a complex corporate network in the fossil fuels sector. With an office in Malaga, the organisation defrauded large amounts of money by not paying the corresponding IVA sales tax on the wholesale marketing of diesel. It did so by repeatedly taking advantage of certain regulation loopholes.

The tax-centered fraud scheme involved using short-lived shell companies to legally purchase fuel from a tax warehouse - fuel wholesaler - transactions in which IVA is not applied. Later, these companies would sell the fuel to service stations charging IVA, but without paying the collected tax to the Hacienda. Instead, they would request a payment deferral, without meeting the legal requirements to do so, with the clear intention from the outset of never paying the amount owed to the tax authorities.

To avoid detection, the perpetrators would replace the shell companies every few months. A total of nine companies were involved in the scam. The investigation discovered that the network was controlled by the main suspect, with the intermediaries serving as each company's administrators.

The appropriation of tax quotas by the organisation allowed the product to be sold to retailers at lower prices than those offered by operators who do comply with the obligation to pay the tax charged to their customers to the Hacienda, thereby creating unfair competition.

The arrests of the ten individuals involved in the network took place on 8 July. In addition, the police seized 193,200 euros in cash and a large amount of documentation pending analysis. The organisation is attributed with the ownership of numerous properties worth more than 10 million euros.