On June 29, 2015, hundreds of National Police agents broke into dozens of brothels throughout the country and arrested more than 60 people. The operation, baptized as 'Pompeya' and directed by the National High Court, dismantled a network of companies and bank accounts with which the owners of the premises diverted their profits, avoided paying taxes and guaranteed the anonymity of their clients. Seven years later, the case has slimmed down to the point of prosecuting only tax crimes and the Prosecutor's Office has appealed the indictment for claiming that brothel owners have to declare VAT and consider exploited women as workers for tax purposes: "This expression is, in the opinion of the Public Prosecutor's Office, a laundering of the activity of pimps contrary to human dignity. Neither the pimp is a businessman, nor is the prostituted woman a worker, nor is prostitution a provision of services freely agreed between adults, "says the case prosecutor.
The case began with a complaint from the Prosecutor's Office in 2014 that proposed a much broader investigation against the owners of some of the largest brothels in the country. Crimes of criminal organization, trafficking and against the rights of workers, among others. The National Court discovered that in many of these premises the money paid by credit card did not go to the bank accounts of the owner or the premises, but to a Basque company called Larratruk that offered a double service to its customers: they could go through the cashier to withdraw it without giving explanations to the Treasury and, in addition, they preserved the privacy of their clients and their service of sexual exploitation of women in the documentation. The Larratruk company, meanwhile, charged a commission and declared only a small part of the money that passed through its more than 130 Point of Sale Terminals (POS).
Thus, according to Judge José Luis Calama, a total of 32 people contributed to committing a total of 119 tax crimes and a total fraud of 111.6 million euros between the Corporation Tax that their companies did not pay, the Income Tax of Individuals (IRPF) that the defendants did not pay and, finally, the VAT that was not declared for the services they provided. And this is where one of the many clashes between the investigating judge and the Prosecutor's Office has just taken place: the judge considers that they should be required to pay VAT while the Prosecutor's Office understands that they should not because, as explained in various writings of the case, that consideration is "a whitewashing of the activity of the pimps contrary to human dignity".
Prosecutor Carlos García Berro's complaint comes because in the order with which the judge rejected his first appeal, the reform, the magistrate reflected that it was correct to criminally claim VAT payment because prostituted women should be considered "workers for tax purposes ". The prosecutor in the case is forceful in assuring that "neither the pimp is a businessman, nor is the prostituted woman a worker, nor is prostitution a provision of services freely agreed between adults."
The Prosecutor's Office understands that criminal action must be sacrificed for this tax so as not to give prostitution a labor charter, something ruled out by various international bodies and the social chamber of the Supreme Court itself. "This principle of the dignity of the human being and, especially in this case, the dignity of women must be maintained in all cases, both when it favors the exercise of criminal action (which will be in most cases), and when it prevents it. , as is the case in this case," says the Prosecutor's Office.
This dignity of women, he adds, cannot depend on the criminal action that is exercised at all times and if this accusation of fiscal crime is based on affirming that prostituted women are workers, the prosecutor settles, "the exercise of of the same for attacking the dignity of women". He relies on resolutions ranging from the Convention for the Suppression of Traffic from 1950 until a recent judgment of the National High Court who refused to enroll a union of prostitutes.
The case started in 2015 to investigate not only the finances of the brothels but also the sexual exploitation of hundreds of women. Over time, however, the proceedings have been slimmed down to focus on the tax crimes of the group's leaders, divided into six different pieces. The reasons are collected, among other documents, in a letter from the Prosecutor's Office last year in which it requested the file of the investigation for these crimes for several investigated: "There is no data that indicates the existence of a coercive exercise of prostitution in none of the referenced clubs. As unfortunately pimping is contemplated in our current legislation, it requires proof of a negative fact, "explained the Prosecutor's Office in the Pompeya case.
In this case, he said, the investigation was "more focused on the analysis of the benefits of sexual exploitation than on sexual exploitation itself" and that has made it impossible to determine whether the women were being coerced in any way that could be proven before a judge. court. "It has not been possible to determine the existence of the imposition of the exercise of prostitution taking advantage of the vulnerability of women," lamented the prosecutor. "The sexual exploitation perpetrated in the clubs obeys, therefore, a method of capitalist exploitation of the labor force with a tight control of the processes of production, distribution and trade of the sexual services offered", he concluded then with some arguments that yes the judge accepted in that case.
In this new writing, appealing against the indictment that sent 32 people to the bench for more than a hundred tax crimes, the prosecutor reproaches the instructor for having changed his criteria and now ensuring that prostituted women are workers. "It is not possible in the same cause to affirm one thing and the opposite at the same time," he reproaches. The change in the instructor's criteria, he reiterates, constitutes "a whitewashing of pimping" because "prostitution cannot constitute the basis of an employment relationship." On the contrary, he says, that implies that the pimp is considered a businessman.
The Prosecutor's Office recalls that prostitution is not something prohibited in Spain, "if tolerated" but that, it adds, "does not mean much less that the intercourse purchased is subject to VAT at 21%". The Law on Sexual Freedom, which is still in process, plans to add an article to the Penal Code to condemn whoever uses a property or establishment to favor prostitution, even with the consent of the exploited woman. "It is more than likely that the activity that is intended to be subject to VAT will go from being a criminally tolerated or not illicit activity, to being a criminally relevant activity, that is, prohibited."
The matter is now in the hands of the criminal chamber of the National Court after the Prosecutor's Office has challenged several aspects of the abbreviated procedure order and has requested, among other things, that several brothel owners be prosecuted for not paying the Tax of Societies. It also requests that the case be filed against several people as there is no evidence that they have participated in the defrauding machinery of millions of euros to the public coffers.
Judge Calama's abbreviated procedure order, now pending ratification on appeal, explains how the Larratruk company was created in 1998 by Jesús María Larrañaga Azpitarte, one of the defendants, to put his dataphones at the service of third-party companies that wanted to channel their income of credit card behind the Treasury. According to the judge's data, between 1998 and 2014 he has operated "in more than 80 clubs in Spain and has been the holder of more than 300 current accounts." He calculates the judge that in this time more than 203 million euros have passed through his dataphones.
Over time, the business expanded and new companies appeared, such as Serfila 2000, Boswill Investment, Baglung Corporation or Bundaberg Corporation, supposedly to continue doing the same. Some brothel owners, at one point, began to create their own companies along with others in tax havens to get more out of their profits and buy, among other things, houses in Aravaca or Estepona.
The order cites 17 clubs managed by five defendants in Madrid, Catalonia, the Valencian Community, the Region of Murcia, Euskadi and Navarra. One of them is José Herrero, in charge of the Flower Park and Lovely in Madrid and the Riviera in Barcelona, convicted of his involvement in a police plot that gave favored treatment to brothels in Castelldefels. that sentence of the Riviera-Saratoga case It was the one that marked the path of fiscal crime to this Pompeii macro-cause by acquitting them of induction into prostitution.
Another is Ángel Crispín Gilaranz, owner of Luxury and Vive Madrid –recently renamed "Vive Café"– in the capital. A third group of defendants is led by José Moreno, with the Eclipse and Edén clubs in Girona. Another is the one led, according to the judge, by Arsenio Pérez with the Topacio and Princesa clubs (Murcia), also Castillo, Edén Roc, Club Ninot and Hotel Las Mimosas (Alicante and Valencia) and Club SKP (Madrid). Finally, a fifth group of fraudsters would be headed by Santos Pérez and his clubs Frontera (Irún), Errotaberri (Donosti) and Huracán 2000 (Navarra).
The judge of the National Court explains that the accounts and tax returns of the premises and their companies reveal that the fraud existed. In the case of the Flower club in Madrid, for example, he highlights differences of millions of euros in the turnover of consecutive years, abysmal variations in the number of sales of drinks or personal income tax returns that the judge considers incompatible with each other.