Police detain 16 for suspected €5.6 million tax scam on imported cars 

Scam has created “significant distortion in automotive sector”

Portugal’s Judicial Police have announced the detention of 16 people today, suspected of being part of a criminal network that has damaged the State by €5.6 million through the illegal importation of thousands of vehicles.

In a statement, the PJ, through the Northern Directorate, in conjunction with the Tax and Customs Authority – Porto Finance Directorate, says it carried out an operation to fulfil arrest warrants and home and sundry property searches, for the alleged practice of the crimes of qualified tax fraud, money laundering, document forgery, computer fraud, illegitimate access, corruption and criminal association.

“The investigation concerns a tax fraud scheme by a group of companies set up to artificially and maliciously alter the VAT regime applied on imported cars, creating conditions so that, at the end of a chain of transactions, the ultimate taxpayer is able to sell a car with a much lower tax rate than it should legally have“, explains the force..

In the operation, dubbed “Auto Evasion“, 16 people were detained and 89 searches were carried out in the districts of Porto, Paços de Ferreira, Paredes, Lousada, Penafiel, Amarante, Famalicão, Guimarães, Vila Real, Chaves, Montalegre, Murça, Peso da Régua, Santa Maria da Feira, Faro, Albufeira, Portimão and Olhão.

Among detainees, aged between 35 and 50, are five car salesmen, two certified accountants and an employee of the Tax and Customs Authority.

“By colluding with all those involved, they have thus introduced thousands of vehicles into the domestic market at a retail price significantly below the normal market price, generating a significant distortion in the automotive sector, which accompanies a loss to the public purse estimated, for now, at already around €5.6 million “, the statement continues.

The PJ adds that, “instrumentally, this criminal organisation also falsified documents and introduced and modified computer data”.

“The proceeds of the illicit activity were applied in its promotion with a view to obtaining a prominent position in the sector and in the acquisition of material goods, namely real estate, even expanding activity to other countries of the European Union where they had already created investment companies“.

In the course of the proceedings, 28 cars, computer equipment, two firearms, cash and various documentation with possible probative scope have been seized.

Those arrested will be presented to the Criminal Investigation Court of Porto for a first judicial interrogation and application of bail measures.

The investigation is led by the Public Prosecutor’s Office – DIAP (Central Department of Investigation and Penal Action) of Porto.

The police operation involved investigators and experts from various departments of the Judicial Police, as well as members of the Tax and Customs Authority.