IS members funded through 'VAT scam' by Spanish cell

Large-scale VAT fraud in Denmark earned a Spanish extremist cell millions of dollars that were used to send members to join the Islamic State group.

MENA

2 min read

The New Arab

07 May, 2019

A complex tax fraud scheme earned the ground almost $10 million [getty]

A Spanish extremist cell funded itself through tax fraud on chicken, cheese and chocolate sold in Denmark, earning millions of dollars to send its members to fight for the Islamic State group.

This according to an investigation published on Tuesday by non-profit European newsroom Correctiv.

Based in Melilla, a Spanish autonomous city located on the north coast of Africa, the cell managed to raise at least eight million euros (nine million dollars) in a complex VAT fraud scheme since 2005, said online newspaper El Confidencial, a Correctiv member.

The money was spent on sending 24 Moroccans and two Spaniards to Syria, Mali and Libya to fight for IS.

Six members of the cell were arrested in 2014, a spokesman for the Guardia Civil police force told AFP.

A judicial investigation into the group's activities is still underway.

The cell, through contacts with extremists in Denmark, the group formed ties with 41 mainly Danish companies.

Through those ties, members of the cell or its supporters were given senior company positions over the years.

The cell used loopholds in European law to avoid paying value-added tax (VAT) on food products sold by the firms, using a complex network of shell companies.

VAT fraud allows criminal groups across Europe to embezzle 50 billion euros ($55,861,500) a year intended for state coffers, according to Correctiv.