The Alicante Audiencia held one of its most intense sessions this Tuesday in the Auto Salón fiscal fraud case as tax experts testified, anchoring the charges with firm conclusions. The technicians reaffirmed their findings that VAT was improperly deducted on luxury cars purchased in Germany and argued that the funds were laundered later through real estate deals conducted via the corporate structure. Within the corporate veil, the witnesses described simulated operations covering the very purchase of the cars, the loans, and the fake rental agreements, all designed to conceal the fact that the VAT on those luxury vehicles never reached the Treasury.
In the defendant’s dock sit six accused, led by what prosecutors call the ringleader, the head of the Auto Salón group, Juan Andrés C. P., together with his partner who coordinated the importing companies and acted as the public face of the group. Juan Andrés C. P. faces charges totaling 44 years in prison and a 33 million euro fine for tax fraud, falsified documents, and money laundering.
This moment is highly anticipated by both prosecutors and defense teams because it underpins the entire investigation. The report’s author, José Ramón Solano, died in 2021, necessitating the appointment of a new expert to respond to questions from the parties during the trial. The replacement meant the hearing could not proceed until the new expert had reviewed the case in full. The examination occupied much of the morning and spilled into the afternoon, with the defense seeking clarifications about irregularities cited during the investigation, including a lack of documentation supporting the early steps of the inquiry. The inspector testified that the information came from model 347, the yearly declaration of operations with third parties filed by the investigated companies, and that cross-referencing the data revealed discrepancies.
Hacienda puts the fraud at eight million euros, tied to the VAT on second-hand luxury cars brought in from Germany. The Tax Agency states that the German purchases were made through shell companies, which then sold to so-called “fronts,” exploiting that intra-community acquisitions were VAT-exempt. In the Alicante province, the group’s companies deducted the tax despite it not being paid.
Simulated operations
“If the initial operations had been real, the supplier would have paid the VAT,” explained the inspector, emphasizing that in this case the final recipient benefits from the unpaid tax. He noted that the cars were bought in Germany at a higher price than what the eventual recipient paid, as the documents show VAT non-payment. The inspector reaffirmed that those companies had no real activity and that the money trail pointed to the true beneficiary of the cars. He stressed that the defendants acted as fronts, often older or resource-strapped individuals who could not run the business directly, yet they did not make decisions about the core operations. The accused contend that the real culprits were the car-selling companies, and they merely handled about ten percent of the total movements.
From the Tax Agency’s viewpoint, the purchase of plots and properties served to launder the proceeds from these gains. This contrasted with paper losses shown by the companies, with many transactions routed through two asset-holding entities and sometimes recorded as loans. The inspector noted loan agreements and rental contracts for properties that functioned as another means to move money. The Altea land purchase, aimed at luxury housing, involved companies with minimal capital receiving investor funds.
“If the initial steps had been legitimate, the supplier should have paid the VAT,” the inspector reiterated, highlighting that the final recipient benefited from the uncollected tax. He emphasized that the front people, typically older or lacking resources, did not control the business operations but stood at the helm of the scheme. The defendants maintain that the actual authors of the tax fraud were the companies that sold the cars, and that they themselves only acquired a small portion of the total activity.
From the Tax Agency’s standpoint, the money trail through real estate acquisitions was the laundering channel used to legitimize these profits. The contrast between apparent losses on paper and substantial cash flows through real estate raised questions about the true owners behind the operations. The inspector highlighted purchases of land and buildings and noted several transactions involved loans and leases designed to move money through shell entities. The Altea land deal, meant for a luxury housing project, showed how these ventures with limited cash could move sizable sums through third-party contributions.
One early ruling set the stage for the case: a premature complaint aimed at stopping the sale of the targeted vehicles due to the substantial fraud. The supervisor presenting the denunciation explained that the standard process begins with a preliminary administrative probe before a formal charge is brought. After initial checks by the inspector, evidence pointed to broad fraud that could harm public funds, triggering the Tax Agency to escalate the matter to a judicial process.
The investigation involved Vigilancia Aduanera, the National Police, and the Tax Agency. The complaint followed an initial inquiry that uncovered indications of wrongdoing. The defendants’ lawyers argue that not a single document in the entire packet confirms those early findings. They contend that more than 150 boxes of documentation sat in Tax Agency offices without judicial oversight, a factor they say would invalidate the investigation. (Official court records and Tax Agency testimony, corroborated by audits.)