Social security fraud

National Police are leading the investigation.

20-09-2019Archives

Ten people have been detained by the National Police in Palma in connection with a social security fraud with a value of at least 600,000 euros. A network of seventeen phantom companies was created in order to avoid payment of social security for employees.

The police investigation began in June when an individual received a demand for a large debt from social security. This was reported to the police, who subsequently uncovered a network of companies involved principally in vehicle rental. These companies were managed by frontmen and racked up the 600,000 euros debt to social security. This amount could be higher, as a further company is still being investigated.

As well as non-payment of social security, these companies were used to avoid paying corporate tax and IVA (VAT). There was a company dealing in rented vehicles in Playa de Palma. The conditions of these vehicles are described as having been very poor. They had neither insurance nor ITV (MOT).

Of those who have been arrested, some have admitted they were aware of what was going on but agreed to this out of extreme necessity. Two of the ten are Spanish, others are from Argentina, Chile and Italy. They are said to have had problems of a family or financial nature and faced difficulties with obtaining stable employment. Nine of them were set up as the frontmen.

One of the Spaniards, aged 64, was operating the fraud and is said to have taken advantage of people in a precarious situation. He faces charges of fraud, money laundering, false documentation and offences against social security.

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