€20m phone VAT scam busted in Malaga

Malaga has dismantled a large-scale VAT fraud network linked to mobile phones sales. The criminal network is believed to have dodged over €20 million in taxes since 2019 by operating through more than 20 companies and phone shops across Spain.

Guardia Civil and the Tax Agency conducted 23 searches across cities such as Malaga and Madrid. 15 people were arrested, five of whom are based in Malaga. During the operation, authorities seized 9,000 mobile phones ready for resale, over €200,000 in cash, $35,500 in cryptocurrency and 75 vehicles. In addition, 146 properties and more than 280 accounts were frozen.

The scam involved buying cheap phones and then pretending that they were being sold between companies by using fake shipments. The boxes in many cases contained pieces of wood or bottles of water instead of the real devices. This allowed them to create false records without paying VAT.

Some of the phones sold were “reconditioned” or second-hand to save on taxes. Some of the phones were sent across Europe via online platforms. Investigators claim that the gang made huge profits and invested the money into property in Spain.

Authorities claim that this was one of the biggest operations against VAT fraud over the past few years. An investigation led by the Malaga Court was supported by the Central Operational Unit of the Andalusia Tax Agency and its regional inspection office.