On June 29, 2015, hundreds of National Police agents raided dozens of brothels across the country and arrested more than 60 people. The operation, dubbed “Pompeii” and led by the National Supreme Court, destroyed a network of companies and bank accounts by which building owners shared their profits, evaded taxes and guaranteed the anonymity of customers. Seven years later, the case was reduced to just tax offenses, and prosecutors appealed the indictment over the need for brothel owners to declare VAT and treat exploited women as workers for tax purposes. . “Neither the pimp is a businessman, nor is the prostitute a worker, nor is prostitution a service freely agreed upon by the elders,” the prosecutor said.
The case began in 2014 with a complaint from the prosecution, which offered to launch a much broader investigation against the owners of the largest brothels in the country. Against criminal organization, trafficking and workers’ rights, among others. A national court found that in many of these buildings the money paid by credit card did not go to the owner or the bank’s bank accounts, but to a Basque company called Larratruk, which offered a dual service to its customers: they could leave. The cashier took it out to the treasury without explanation and in addition, they kept the confidentiality of the clients and the sexual exploitation services of the women in the documentation. At the same time, the company Larratruk charged a fee and announced only a small portion of the money that went through its more than 130 sales terminals (POS).
Thus, according to Judge Jose Luis Calama, a total of 32 people contributed to a total of 119 tax offenses and a total of 111.6 million euros in corporate tax fraud, which their companies did not pay, the Personal Income Tax (IRP). That the defendants did not pay and finally, the VAT that was not declared for the services rendered by them. And this is where one of the many clashes between the investigating judge and the prosecution took place: the judge thinks they should be required to pay VAT, while the prosecution understands that this should not happen because, as explained in various letters. In practice, this view is “whitewashing the activities of the massages, which is contrary to human dignity.”
Prosecutor Carlos Garcia Berro’s complaint stems from the fact that in the ordinance rejecting his first appeal, a reform, the magistrate showed that the criminal requirement to pay VAT was correct, as prostitutes should be considered “workers for tax purposes”. The prosecutor in the case forcibly asserts that “neither the pimp is a businessman, nor the prostitute is a worker, nor is prostitution a freely agreed service between the elders.”
The prosecution understands that criminal activity should be sacrificed in order to prevent prostitution from being given a labor statute, which is ruled out by various international bodies and the Social Chamber of the Supreme Court itself. “This principle of human dignity, and especially in this case, the dignity of women, must be upheld in all cases, both when it facilitates the commission of a crime (which in most cases will be the case) and when it prevents it. As it is in this case, “- said the prosecutor’s office.
This dignity of a woman, he adds, cannot depend on criminal acts being committed at any time, and if this charge of fiscal crime is based on the allegation that prostitutes are workers, the prosecutor decides that “the same crime is committed for assault. “The dignity of a woman.” It supports resolutions starting Convention on the Suppression of Traffic From 1950 until the recent ruling of the National Supreme Court, which refused to register a prostitute union.
The case was launched in 2015 to investigate not only the brothel finances but also the sexual exploitation of hundreds of women. However, over time, the process has slowed down to focus on the tax offenses of the group leaders, which are divided into six different parts. The reasons, along with other documents, are summarized in a letter from the prosecutor’s office last year, in which he requested an investigation into several investigated crimes: None of the specified clubs. “Because, unfortunately, pimping is considered in our current legislation, it requires confirmation of a negative fact,” the prosecutor explained in the case of Pompeii.
In this case, he said, the investigation “was more focused on analyzing the benefits of sexual exploitation than on sexual exploitation itself” and this made it impossible to determine whether women were being coerced in any way that could be proven earlier. Judge.Court. “The existence of prostitution through the use of women’s vulnerability could not be established,” the prosecutor laments. “Sexual exploitation in clubs obeys, therefore, the method of capitalist exploitation of the labor force with strict control over the production, distribution and trade of sexual services,” he concluded with several arguments that yes. The judge accepted the case.
In this new letter, appealing the indictment that sent 32 people to the bench for more than a hundred tax offenses, the prosecutor reprimanded the instructor for changing his criteria and now ensuring that prostitutes were workers. “It is impossible to prove one thing for the same reason and the opposite at the same time,” he reprimands. A change in the criteria of an instructor, he repeats, constitutes “whitewashing of the assembly” because “prostitution cannot be the basis of labor relations.” On the contrary, he said, it means the pimp is considered a businessman.
The prosecution recalls that prostitution is not banned in Spain “if you tolerate it”, but it adds that “it does not mean that the purchased sexual act is subject to 21% VAT.” The Sexual Freedom Act, which is still being drafted, plans to add an article to the Penitentiary Code that condemns those who use property or institutions for the purpose of prostitution, even with the consent of an exploited woman. “It is likely that an activity aimed at being subject to VAT will turn from a tolerant or illegal criminal activity into a criminally relevant activity, or a prohibited activity.
The case is now before the Criminal Chamber of the National Court after the prosecution appealed several aspects of the abbreviated procedural order and demanded, among other things, the liability of several brothel owners for non-payment of public taxes. He is also seeking to sue several individuals as there is no evidence that they participated in the fraudulent millions of euros in the public treasury.
Judge Kalama’s abbreviated trial order, now awaiting ratification on appeal, explains how Larratruk was set up in 1998 by Jesús María Larrañaga Azpitarte, one of the defendants, to use his cell phones for third-party companies that wanted to transfer their revenue. Credit card back to the treasury. According to the judge, from 1998 to 2014 he worked for “more than 80 clubs in Spain and had more than 300 current accounts”. The judge estimates that more than 203 million euros have been spent on his phones during this time.
Over time, the business expanded and new companies appeared, such as Serfila 2000, Boswill Investment, Baglung Corporation or Bundaberg Corporation, which are expected to continue to do the same. Some brothel owners, at one point, started setting up their own companies, along with others, in a tax haven to make more of their profits and buy, among other things, homes in Aravaka or Estepona.
The order lists 17 clubs run by five defendants in Madrid, Catalonia, the Community of Valencia, the Region of Murcia, Euskada and Navarre. One of them is Jose Herrero, who is in charge of the Flower Park and Lovell in Madrid and the Riviera in Barcelona, convicted of participating in a police conspiracy that favored brothels in Casteldefels. That sentence The Riviera-Saratoga case It was he who fixed the path of fiscal crime to this macro-case of Pompeii, accusing him of inducing prostitution.
The second is Angel Crispin Gillans, owner of Luxury and Vive Madrid – recently renamed “Vive Café” in the capital. The third group of defendants is led by Jose Moreno, with clubs in Eclipse and Edén Girona. According to the judge, the second one is headed by Arsenio Perez with Topazio and Princess clubs (Murcia), as well as Castillo, Eden Rock, Club Ninotti and Hotel Las Mimosa (Alicante and Valencia) and Club SKP (Madrid). Eventually, the fifth group of swindlers will be led by Santos Perez and his clubs Frontera (Irún), Errotaberri (Donosti) and Huracán 2000 (Navarre).
A national court judge clarifies that the accounts and tax returns of the buildings and their companies show that fraud existed. In the case of the Madrid Flower Club, for example, it highlights the millions of euros in turnover over the years, the sheer variability of the beverage sales or personal income tax return that the judge deems incompatible.
Source: El Diario