80 Spanish Businessmen Deceived in Loan Scam
May 31st, 2010
National Police have arrested five people who are allegedly responsible for a massive loan scam that deceived over 80 Spanish businessmen. The arrests have taken place in Barcelona, Madrid, Valencia and Granada.
According to a statement made by the General Directorate of Police today, the arrested were part of an organised group that offered high figure loans, at very favourable rates, to companies in financial difficulties. They charged large fees in respect of mandatory insurance policies and commission fees on loans that never materialised. Investigators estimate they falsely obtained around five million euros in payments.
The police operation began after several complaints were received from Spanish businessmen who had allegedly been cheated. They had agreed to loans with a group of representatives, supposedly acting on behalf of an offshore bank based on a Pacific island, with amounts ranging between 10 and 20 million euros.
The businessmen were drawn in by various meetings that took place at high profile hotels in Spanish provincial capitals or abroad, including Barcelona, Valencia, Bulgaria, Panama and the British Virgin Islands. The arrested individuals posed as executives of major banks, wearing expensive jewellery, high value clothes, arrived in luxury vehicles and were even being accompanied by bodyguards. Once the victims agreed to the credit application, commitments were signed, however, to fully approve the deal, the companies were required to pay up to €10,000 in relation to insurance policies and commissions – they were then told that the loan amounts would be paid within around one month.
After one month passed, the companies had not been transferred the loan amounts as agreed, which were all due to be deposited in the Bank of Spain. When confirmation of the current status of the loans was requested, they were given varying excuses related to the transfer delay, such as problems when transferring such high amounts of money, additional paperwork required etc. Then, continuing the deception, the swindlers indicated that the loans would need to be granted by another company. And to give credibility to the changes, an alleged representative of the new credit issuer, also a member of the fraudulent organization, began requesting even further commission and related charges.
When police were alerted by the suspicious circumstances, investigations led agents to two individuals of Italian origin who were living in Barcelona and had acted as representatives in the first instance. Both were arrested on suspicion of fraud and forgery. Subsequently, other members of the organization were arrested in the Madrid, Valencia and Granada cities. Among other evidence, cash, jewellery, cars, fake identification, mobile phones and even contracts for the loans and documents relating to the scam were discovered.
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