Spanish police crack huge money-laundering racket

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The Independent Online

Forty one people have been arrested in the resort of Marbella on suspicion of organising Europe's biggest money-laundering network, linked to Russia, America and Canada and worth at least €250m (£175m).

Forty one people have been arrested in the resort of Marbella on suspicion of organising Europe's biggest money-laundering network, linked to Russia, America and Canada and worth at least €250m (£175m).

Funds were said to be illegally siphoned by mafia gangs from the troubled Russian petroleum company Yukos with the co-operation of at least one corrupt company employee, the Interior Ministry said.

Police sources said "huge sums" were transferred from Yukos's Russian bank accounts, apparently without the knowledge of the company or Russian tax authorities. "They seem to have been ripping Yukos off," a source close to the inquiry said.

Yukos, which has been engaged in a stand-off with the Russian government over unpaid back taxes, said yesterday it had no knowledge of the matter and denied any involvement in money-laundering. "It's nonsense. You might as well say we were laundering money on Mars," Alexander Shadrin, a company spokesman, said.

Any suggestion that Yukos was, even unwittingly, involved in money-laundering could be damaging since the Kremlin has repeatedly sought to portray the company as a "criminal enterprise". Its former chief executive Mikhail Khodorkovsky is still being tried for fraud and embezzlement. He denies all wrongdoing. Police have long considered the Costa del Sol as the European heartland of international mafia operations and Russians flocked there in the 1990s following the collapse of the Soviet Union.

Not all of the suspect funds are from Yukos though; other monies are said to have come from criminal gangs engaged in drug dealing, contract murder, kidnappings, extortion, arms trafficking, tax fraud and prostitution. "The worst is yet to come," warned the anti-mafia prosecutor in Malaga, Juan Carlos Lopez Caballero.

Detainees include Spanish, French, Moroccan, Finnish, Russian and Ukrainian nationals, but none was identified. Seven detained lawyers are suspected of using a Marbella legal practice to set up companies that invested illicit funds in luxury goods and property along the Costa del Sol.

A magistrate began questioning detainees yesterday and is due to continue today: three lawyers were released early yesterday on bail of €50,000 each.

Police have frozen bank accounts containing €30m, and seized €410,000 in cash, in addition to 42 luxury cars - including Rolls-Royces, Ferraris, Porsches and Mercedes - a yacht, two aircraft valued at more than €1m each, jewels and artworks.

The black funds were apparently transferred to a Dutch company whose Spanish affiliate reinvested in property development, using the Marbella legal firm, DVA, as intermediary.

Police originally launched "Operation White Whale" in September 2003 to crack down on general mafia crime in Marbella. They found that the DVA legal firm had woven a web of more than a thousand companies registered in tax havens, including Gibraltar.

Fernando del Valle, the Chilean founder of DVA and a resident of Marbella, is suspected of being the brains behind the network. He is among those detained.

When police began their inquiries, they were astonished at the feverish activity at DVA which, in one day, set up seven linked trading companies.

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