Police expose massive fraud scam
AN ORGANISED crime gang that set up companies in order to regularise the situation of migrants and defraud the social security system has been busted by the National Police in Elche.
More than 100 officers participated in the operation, which arrested 125 people allegedly involved with a gang that operated all over the country in collaboration with a law firm. Officers searched a dozen homes and seized €124,000, four high-end vehicles, five computers, a crypto-currency mine – which was illegally connected to the electricity supply – and €112,000 in virtual currency.
“The front companies used the crypto-currency to launder the profits from their illegal activity,” said a police spokesman.
The investigation began in October 2020 by looking into a supposed businessman thought to be committing fraud, falsification of documents and money laundering with a company of lawyers. Officers could not find the companies the suspect was connected to, either physically or online. The suspect also regularly met two people connected with a law firm who were suspected gang members.
The gang seemed to be using the firm to create fake companies in order to create false invoices for companies, which were used to defraud the tax office and fraudulently regularise the situation of migrants.
The fictitious companies provided migrants with documents, contracts and job offers so they could obtain or renew residency permits, and used one of the fake companies – in connivance with employees of a financial institution - to fraudulently obtain credit that was never repaid. The alleged leader of the gang ran a brothel in Elche which turned out to be the registered address of one of the companies linked to the scam. After carrying out the searches, officers arrested all the people who had benefitted from the illegal activity by receiving benefits they were not entitled to or fraudulently obtaining residency, then the owners of the companies that had acquired fake invoices for tax fraud, and lastly six people for bribery and revealing official secrets. One of these was a civil servant who belonged to the gang and charged money to obtain information from official databases.