The Spanish Guardia Civil busted a criminal enterprise operating in Spain and Germany this week, which used a network of food establishments, including kebab meat suppliers, to conceal their activities and launder €36 million of its ill-gotten gains.
Five individuals were arrested, while more face charges. The Guardia Civil’s investigations, supported by Europol, began in the summer of 2015 when police agents from the Barcelona-El Prat airport discovered that money was a being sent from Spain to Germany on a weekly basis. Running its activities from Barcelona and Alicante, the criminal organization was transferring large sums of money between the two countries, ranging from €90,000 to €300,000 euros.
The money laundering criminal structure justified the transfers to the airport authorities as payments of Spanish companies to a German company for kebab meat supply. The investigation revealed that the Spanish companies did not even run real commercial activities.
In the course of the investigation it was established that the organization, operating since 2012, had built up a network of front companies involved in money laundering. It is possible that some companies were not even aware that their data was being used to justify false invoices.
Spanish authorities estimate that around €36 million euros have been transferred and laundered by the criminal network justified as payments for trade activities which were not accounted for and reported to the National Treasury.
As a result of the operation, the Spanish Guardia Civil blocked 36 bank accounts and financial products and 35 credit cards and seized 5 properties in the province of Alicante worth approximately €470,000 euros.
“This investigation shows once again that criminal business is still largely done in cash,” Simon Riondet, Head of Financial Intelligence at Europol, explained. “Professional money laundering syndicates offer cash courier and compensation laundering services for illicit proceeds. Very often networks of front and shell companies are established in order to facilitate the movement of the money and to provide justification for the proceeds. These activities are further enabled by the lack of cash payment restrictions in some EU countries which allow justifying large cash amounts as payments for trade activities.”
Action needs to be taken, Riondet adds. “The continued law enforcement seizures of bulk large denomination banknotes and the prevailing trade-based money laundering schemes reinforce the need to discontinue the production and circulation of 500 and 200-euro banknotes and set an EU-wide framework for restricting or setting a common limit for cash payments.”
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