The criminal scheme that surfaced in 2016 centered on a million-dollar VAT fraud tied to hydrocarbon trades and the fictitious sale of precious metals. It operated as a carousel scam involving more than fifty companies across Spain and Portugal and was ultimately dismantled. Although prosecutors initially sought a total prison term of 288 years for twenty defendants, the network’s principal figures, with a notable presence in Vigo, faced truthful admissions that significantly trimmed penalties. In February, the National Court confirmed a substantial reduction in sentences and ordered restitution to the Tax Agency, marking nearly 23 million euros defrauded in 2015 and 2016. The case also involved two Valencia and Tarragona companies, Ital Refining SL and Meridium Petroleum SL, which played pivotal roles but could not reach a negotiated agreement with the prosecution. This outcome followed a long investigation that brought a broad cast of players into the spotlight and highlighted the gravity of the scheme.
The court ultimately accepted a mitigation that reduced the original charges. The defendants were found to have engaged in crimes against treasury, falsification of commercial documents, and money laundering. Leading the conspiracy was Stefano C., a Valencia-based Italian businessman, who collaborated early on with Catalan associate Rafael MM. Over time, Rafael MM distanced from the initial partnership and established his own parallel scheme. The principal partner linked to the Italian operation was a man from Ourense who resided on Rosalía de Castro street in Vigo. José Benito RG, whose residence was later found to house substantial gold, including three kilograms, and a cache of cash exceeding 211,000 euros. In Vigo, Olívica, and surrounding areas, the defendants included an agency manager, an employee, a lawyer presenting himself as a top conspirator and a tax adviser, plus two women connected to José Benito, one his former partner and a citizen of Albania, the other, a Paraguayan, who joined the operation in 2016. These two women acted as fronts for several entities involved in the scheme.
operational
The 2021 sentencing order notes that the defendants carried out a fraudulent operation designed to evade payment of substantial sums. They described an economic activity built on hydrocarbon VAT that was channeled through two companies condemned in this macro procedure.
Case
An operation from 2016
The arrests and searches that exposed the conspiracy occurred in Vigo and other cities during 2016.
A framework of 50 companies
Beyond the two main entities, fifty additional companies participated in the tax evasion scheme.
A significant reduction in sentences
Despite a prosecutor request for a combined 288-year term, the final sentence totaled 30 years after the defendants admitted guilt.
To carry out the elaborate scheme, parallel trading activity occurred between Spain and Portugal around the purchase and sale of precious metals. The operation relied on front and instrumental companies, or what authorities referred to as dummy entities. Goods moved through routes between the two countries without real value transfers. X-ray scans revealed empty cans where declared 22-carat gold solder should have appeared; instead, contents were salt or turmeric. The same process circulated through Valencia, Vigo, and Porto for weeks without reaching consumers. In many cases, boxes appeared to carry value while actually containing little to nothing, a tactic used to justify an unreal VAT deduction. The judges concluded that the deception was designed to create a false trading reality.
laundering through gold purchases or sponsorships of motorcycle teams
The stolen funds moved through the accounts of various companies within the network. Each member took a share of the ill-gotten VAT, but the money system remained centralized to support the overall fraud. One method of whitening the proceeds involved gold purchases. The Italian ringleader arranged with a home-country company to set the gold’s value at an opportune moment to maximize returns. Transport of valuable goods occurred via air freight, with authorities estimating around 87 kilograms of gold moved under the operation. About half of these holdings were registered in a safe deposit under the wife’s name, and another portion, three kilograms, were found in the Vigo principal suspect’s residence. A house search conducted by law enforcement uncovered additional gold assets. The scheme also used redirection of funds to Slovenia and the purchase of fuel to mask the flow of money. The National Court noted that a plan to sponsor motorcycle racing equipment existed, with roughly one million euros invested to finance participation across different world championship categories. When the framework began to unravel, negotiations floated a final price of 1.4 million euros related to a Valencia commercial property purchase. The National Court’s decision remains subject to possible appeal before the Supreme Court.