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Country reports: Europe and Central Asia
as Operation Ballena Blanca or certain aspects of Operation Malaya, that have exposed the extent of money-laundering in Spain and the central role of some law firms.3 Operation Hidalgo broke on the Costa del Sol in April 2007, with more than twenty arrests in Málaga and Marbella. The suspects included three notaries, two of whom were also implicated in the Ballena Blanca and Malaya corruption cases, although the cases against all of them were dropped. Four lawyers from the offices of Rafael Cruz Conde in Marbella were also arrested. Property was searched in a number of Spanish provinces, but most attention was focused on the Rafael Cruz Conde offices, considered to be at the centre of the scandal.4 The anti-corruption prosecutor believes it is linked to 800 ghost companies set up to launder money obtained from ‘all types of criminal activity’, including drug-trafficking.5 The first judge in charge of the judicial investigation was taken off the case in July 2007, as he was under investigation himself following the Malaya case for corruption on the Marbella town council.6 He was also suspected of taking bribes from some of the Hidalgo suspects to get them out of jail.7 He was sentenced to two years in prison in August 2008 for bribery and prevarication in relation to his involvement in the Malaya case, but is also under investigation in relation to Hidalgo.8 Although the implication of this judge appears to be an isolated case, it suggests the strength, reach and capability of the criminal networks on the Costa del Sol.
In November 2007 the investigative judge from the Marbella Court of First Instance fixed the civil liability of the top 10 people involved at €520 million (US$730 million), which is three times the amount they are thought to have defrauded.9 Although judges generally have some room to manoeuvre when fixing these liabilities, the decision to fix a quantity so high shows a clear concern for the seriousness of the crime. In some positive developments following this string of cases, El País reported that the executive service of Bank of Spain’s (the central bank’s) Commission for the Prevention of Money Laundering and Monetary Offences (SEPBLAC) was taking a tougher stand with law firms to improve their cooperation in pursuing this kind of crime. According to the SEPBLAC, while notaries, real estate agencies and tax consultants have notably improved their cooperation in the fight against money-laundering, this is not the case with lawyers. Although the former are now communicating to authorities many more suspicious operations of money-laundering than in previous years, lawyers still resist this duty and tend to overprotect their clients. The SEPBLAC wrote a letter to ten distinguished Spanish law firms in December 2007 asking for their cooperation and warning them about possible future inspections if the information received was not adequate.10 While it is clear that there are still considerable factors in Spain that draw legitimate business into the criminal realm, it is encouraging that not only have severe civil liabilities been assigned
3 See Organización Profesional de Inspectores de Hacienda del Estado, ‘Fraude, corrupción y blanqueo de capitales en España’ (‘Fraud, Corruption and Money-laundering in Spain’) (Madrid: Organización Profesional de Inspectores de Hacienda del Estado, 2007). This report discusses the difficulties in investigating these crimes and the limited willingness of political authorities to develop a tougher policy. 4 El País (Spain), 17 April 2007; 20 December 2007. 5 Cinco Días (Spain), 18 April 2007 6 El País (Spain), 5 July 2007. 7 El País (Spain), 5 March 2008. 8 Sur (Spain), 8 August 2008. 9 See a general overview of the case in El País (Spain), 9 February 2008. 10 El País (Spain), 24 February 2008.