23 people were arrested
The Civil Guard and the Tax Office dismantled a cross-border intra-community VAT fraud scheme centered in Valencia, focused on high end vehicles. Known as Operation Cavallino, the case led to the arrest of 23 individuals across Valencia, Torrent, Bétera, Llíria, Pobla de Vallbona, Marines and Olocau. Authorities reported the seizure of 75 vehicles and 44 bank accounts, the confiscation of 17 properties, and other assets as part of the investigation. Prosecuted estimates indicate the organization defrauded around 14 million euros in VAT.
Investigations began in 2021 when the National Bureau of Fraud Investigation and the Regional Inspection Unit of the Tax Office in Valencia, in collaboration with the Civil Guard, traced a Valencia based network that used a web of front companies. These entities operated as intermediaries, presenting themselves as legitimate business operators while hiding the true vehicles in Spain.
Initial registrations placed these intermediary firms in the Intra-Community Operators Registry, allowing them to appear to purchase vehicles through a network of fronts at the expense of the group, with a so called primary supplier located in Germany.
Behind the scenes, the schemes did not reflect real purchases. In reality, the vehicles were bought directly from German dealers by a range of companies connected to the network. This arrangement enabled the group to leverage VAT rules to the fullest and move money through various channels, undermining the treasury.
The arrests occurred between November and December of the year, following a lengthy inquiry. A total of 23 suspects were detained, comprising 18 men and five women. The group included individuals of Spanish and Romanian nationality. Detainees faced accusations of tax crimes, money laundering, and forming part of a criminal organization.
During the operation, authorities conducted searches at two addresses, three public dealers, and three storage facilities used by the organization to house and preserve vehicles.
Beyond the arrests, the operation resulted in the blocking of 75 mid to high end vehicles valued at more than seven million euros, with 18 of them classified as high end and valued at around two million euros. Bank accounts belonging to 14 individuals and 30 companies were frozen for 1.35 million euros, while 17 properties were placed under seizure with an estimated value of three million euros. Additional assets included seven watches valued over a hundred thousand euros, six computers, six mobile devices, and a substantial corpus of physical and digital documents tied to the case.
Throughout the investigation, cooperation from Europol played a key role, serving as the information exchange contact with other European Union members, particularly Germany.
The case is linked to an early VAT fraud scheme managed and coordinated by the European Prosecutor’s Office in Spain. Proceedings were transferred to the European Prosecutor’s Office in Spain, and new arrests could be considered after a thorough review of the extensive seized material and documents.