Elche companies swindle a million euros in subsidies

A business network in Elche has been dismantled, and four individuals have been arrested for defrauding over one million euros in public subsidies from the Valencian Government and the European Social Fund to promote employment. They spent the funds on high-end cars and used them for unrelated purposes.

The investigators became suspicious when the companies promptly dismissed the contracted workers, voluntarily resigned, or ceased operations.

The fictitious contracts were identified as a result of a complaint submitted by the Valencian Employment and Training Service (LABORA) to the Anti-Corruption Prosecutor’s Office regarding potential irregularities.

Public aid was exploited by structured fraud to facilitate the employment of qualified personnel and vulnerable individuals. Despite the initial formalisation of employment contracts, they frequently failed to satisfy regulatory mandates.

The Urban and Economic Crimes Team of the Organic Judicial Police Unit of the Guardia Civil of Alicante has been conducting an analysis of the traceability of the money received for nearly a year. The team has identified transfers between bank accounts associated with the individuals involved and diversions to personal expenditures.

In April of last year, a search of the group leader’s private residence in Elche, as well as certain offices that are still in use in the city’s technology park, turned up €9,000 in cash, a high-end vehicle, and various pertinent documents. The authorities also seized properties and accounts.

The court presented the four detainees and released them after taking precautionary measures against the alleged leader.

They face accusations of money laundering, contract execution failure, membership in a criminal organisation, and subsidy fraud.

The Civil Guard has emphasised the institutional collaboration necessary to combat this type of fraud, stating that “the investigation was conducted under the direction of the Prosecutor’s Office against Corruption and Organised Crime of the Alicante Provincial Prosecutor’s Office, with the collaboration of LABORA.”