National Police agents have uncovered a fraud of 17,269,753 euros to Social Security in the province of Las Palmas. The investigations of the 'Paloma' operation have been carried out both on the island of Gran Canaria and in Fuerteventura and Lanzarote, and the fraud was being carried out in sectors as diverse as hospitality, textile marketing, wholesale trade of fish, real estate services, construction and reforms.
The investigations began in November 2019, after receiving several communications from the General Treasury of Social Security in which police action was required in the face of various allegedly irregular actions carried out by the administrators of different companies in order to evade their payment obligations with Social Security. These companies were located in the judicial districts of Las Palmas de Gran Canaria, San Bartolomé de Tirajana, Telde, Arrecife (Lanzarote) and Puerto del Rosario (Fuerteventura).
According to the Police, the businessmen of the investigated companies did not pay their own social security or that of their workers, thus increasing the profit margin in the commercial activity and the consequent damage to the General Treasury of Social Security, also allowing the fraudulent collection of benefits from the State Public Employment Service (SEPE).
In the asset analysis of the companies and their administrators, it was verified that in all cases the intention was to evade the payment of the debt and frustrate the legitimate collection aspirations of the Treasury, creating opaque business successions and shell companies that hid the profits and assets of the investigated companies.
The agents of the Central Unit of Economic and Fiscal Crime have been able to determine the criminal participation of 46 individuals, mainly the de facto administrators of the companies, their front men or interposed persons, workers who appeared in connivance, as well as relatives of the former, being charged with crimes against social security (fraud of contributions), frustration of execution, fraud against social security (benefits), procedural fraud and punishable insolvency.
A company without activity in Panama to divert its assets
In one of the cases, according to the National Police, an administrator and his three children ran a company dedicated to the wholesale trade of fish, seafood and other food products, billing their clients for significant amounts of money.
However, this company systematically and continuously failed to pay Social Security contributions, without any requests for deferrals to the General Treasury of Social Security, or attempts to regularize the debt, but rather did the opposite to avoid satisfying them by creating other companies to divert its assets. Even, they created through front men a company in Panama, without any corporate purpose or activity in this country, with the sole purpose of serving as a social instrument for financial operations, with an initial contribution of shares, credits and obligations of the business group itself.
The companies that formed this business group, always managed by the same family nucleus, were used to carry out a high cross-billing between them and divert the income received, avoiding payment to creditors, as well as other operations to decapitalize the main company before an imminent bankruptcy proceeding, among which is the fraudulent transfer of assets and rights to the Panamanian company.
Within the business group itself and in order to divert the money, the sale of a ship was carried out for an amount of 5,600,000 euros, with the main company being the one that acquired this ship from a Uruguayan company that actually belongs to the same group.
The main company appeared in bankruptcy proceedings, with a high recognized credit but despite this, the administrator raised the "Paid Remunerated Concept" to his three children based on a verbal contract and a concept "absorbable personal plus" seven times higher than the base salary received and not by requirement of the Collective Agreement or written employment contract, allowing each child to receive about 10,000 euros per month for several years.
Companies in the name of front men
In another of the investigations carried out, an administrator constituted a company in his name dedicated to the construction of residential buildings, but in turn used unqualified and resourceless workers as front men for the constitution of new companies that he himself managed, being used to divert income without paying the debts generated by the predecessors. He also used the bank accounts of the company created by his sentimental partner to divert the income received.
In the payment of suppliers, he used interchangeably the Contribution Account Codes (CCC) and Tax Identification Codes (CIF) of the companies, even if they had ceased their activity, causing great confusion among the client and supplier companies.
"In order to achieve the declaration of insolvency of the companies before the Commercial Court, he deliberately caused the alteration of the accounting of the bankrupt companies by diverting the billing to the administrator himself as a company and later to the companies constituted and managed by himself but in which front men appeared, to continue his activity", adds the Police.