Non-existent firms fleece Social Security

Police arrested 150 people following an investigation into 30 fictitious companies which defrauded millions in Social Security payments. 

A further 277 face charges for involvement in the large-scale swindle which operated in Barcelona, Tarragona, Gerona and Jaen.  

At least 406 people, mainly Moroccans living in Cataluña, paid between €300 and €500 to be registered on the payrolls of non-existent businesses.  They were then able to renew work and residence permits.

A total of 3,375 people were registered as employees, with 398 “working” long enough to draw unemployment pay totalling €2,667,000.

The fraud came to light last year when Work inspectors in Barcelona detected firms that appeared to have no valid activity and were in arrears with employees’ social security payments.

Further investigation uncovered the network of 30 companies. Most of the supposed partners and administrators, many from disadvantaged backgrounds, performed no duties at all and one of the detainees turned out to be a pizza delivery boy.  All were figureheads chosen to mask the true identities of the people behind the scam and deflect official scrutiny, police said.