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Police bust suspected Chinese-run fraud operation in Spain

By Al Goodman, CNN
updated 8:57 PM EDT, Tue October 16, 2012
  • Spanish Interior Ministry says more than 80 people arrested, including well-known figures
  • Ring generated several hundred million dollars in proceeds in recent years, ministry says
  • Arrests were made and evidence seized in Madrid, Barcelona and other cities
  • The ring also is accused of prostitution and human trafficking

Madrid (CNN) -- A suspected Chinese-run money-laundering and tax fraud operation in Spain that generated several hundred million dollars in proceeds in recent years was busted Tuesday, with more than 80 arrests, the Spanish Interior Ministry said.

Most of the suspects are Chinese, including a well-known figure who lived in a luxury development in Madrid. They also include a Spanish male porn star, whose production company is suspected of issuing false invoices to help launder funds, the ministry said.

Police moved in early Tuesday to make arrests and seize evidence in Madrid, Barcelona and other cities. A center of the operations was suspected to be in an industrial zone in the Madrid suburb or Fuenlabrada, where a number of wholesale businesses sell all types of imported Chinese goods.

The system was based on importing large quantities of Chinese goods to Spain and declaring customs on only a fraction of them, so that the merchandise ended up in Chinese-run retail shops in neighborhoods across the country. Profits were taken that then needed to be laundered, the ministry said.

A Spanish town councilman from Fuenlabrada also was arrested, suspected of issuing licenses in exchange for payments.

The ring was suspected of laundering 200 million to 300 million euros annually in recent years. Police began investigating two years ago.

Police found containers in ships, cars and vans that held large sums of cash.

The ring also is accused of branching out into other criminal activities, including prostitution and human trafficking.

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