17 million Euro Social Security fraud by group in Canary Islands
46 people have been identified in a case of Social Security fraud with links to Gran Canaria, Fuerteventura and Lanzarote in various sectors including the hotel industry, textile marketing, commerce wholesale of fish, real estate services, construction and renovations, quantifying the total fraud at 17,269,753.16 euros.
The investigations began in November 2019, after receiving several alerts from the General Treasury of Social Security in which police action was required due of the various allegedly irregular actions carried out by the administrators of different companies in order to evade payment of Social Security. The employers of the investigated companies did not pay their own social insurance or those of their workers, thus increasing the profit margin in commercial activity.
The companies that formed the business group, always run by the same family, would bill between their own enterprises and then would divert the incoming profits into other businesses, therefore setting the main company up for bankruptcy to avoid paying tax and social security.
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In one case an administrator and his three children ran a company dedicated to the wholesale trade of fish, shellfish and other food products, billing their clients for large amounts of money. However, this company, in a systematic and continuous way, did not pay the Social Security contributions; to avoid paying they created other companies to divert their assets. They even created a company in Panama through front men, witho]ut any corporate purpose or activity in this country, with the sole purpose of fraudulent activity.