Spain Diesel scammers defrauded €5.5m in taxes in 8 months

 

A criminal gang that was adulterating low-grade diesel so it could be sold to regular gas stations in Spain is alleged to have defrauded €5.5 million of fuel duties in just the last eight months. But the ring, which was busted by Spanish authorities this week, is also thought to have racked up a long list of other offenses, including document fraud and value-added tax evasion.

The organization, which was based on a network of nine criminal groups, was detected by Spain's Customs Surveillance Service three years ago. Among the figures involved in the scam are a number of well-known career criminals, some of whom had already been implicated in a similar scheme put in place in Catalonia in 2009.

The 52 searches carried out by the police in Thursday's raid turned up €1.2 million in cash, 331 vehicles and 128 properties. The bank accounts of the organization are still being investigated, and are likely to turn up even larger amounts.

So far, 47 gas stations are being investigated, but that number may rise as more inspections are carried out. A total of 98 people have been arrested thus far.

The investigation began in a plant in Yuncos, Toledo, which the network used to adulterate the B-rated diesel so that it looked like fuel that could be used for vehicles. This lower-grade fuel – along with the C-rated type, also doctored by the gangs – is normally used for farm machinery, fishing boats and heating.

The Civil Guard chief in charge of the investigation, Antonio Balas, drew attention to the damage that the gang has caused in the market. Their manipulation of the diesel – which involved removing the red dye used to designate B and C grade, as well as adding other products to bulk it out – not only posed a risk to vehicles that used it, but pushed down prices.

The savings in taxes alone came to €0.28 per liter, allowing the gang to corner the market.

According to the civil guard chief, some gas stations, operating under major brands, were forced to buy from the network in order to be able to compete on prices.

"They had their own fleet of trucks and tankers," explained Balas. "But they didn't fill their own tanks with the diesel they supplied."

The judge has sealed the investigation, meaning that the list of gas stations that have been searched is still unknown. In his writ, the judge argued that there was no further risk to consumers, given that the adulterated fuel had been removed from the service stations in question.

Recommended Reading :

* ECJ rules Spain must pay back fuel tax