Stamp fraud could cause economy 'grave damage'
11 May 2006, MADRID — The EUR 3.5 billion investment fraud involving two stamp dealing companies could have "grave repercussions" for the Spanish economy, prosecutors claimed.
11 May 2006
MADRID — The EUR 3.5 billion investment fraud involving two stamp dealing companies could have "grave repercussions" for the Spanish economy, prosecutors claimed.
Judge Santiago Pedraz, who is leading the inquiry, lifted a secrecy order around the case against Afinsa, which is implicated with Forum Filatelico in the EUR 3.5 billion scam.
Nine executives from both companies were appearing in court in Madrid as almost 350,000 small investors across Spain were trying to find out if they could get back their savings from the alleged fraud.
Court sources said Afinsa is accused of overvaluing stamps which were then sold on to investors.
The company is accused of a fraud "which could cause grave repercussions for commerce and the Spanish economy in general".
Both companies were said to be bankrupt.
They are accused of fraud, criminal insolvency, money laundering, tax evasion and embezzlement.
The two companies were said to have operated a classic pyramid-style fraud in which investors were promised returns of up to 10 percent on investments in rare stamps.
But in fact, the companies could never make the promised returns so depended on a constantly rising number of investors.
Small investors were charged too much for stamps which were over-valued. The investors never saw the stamps.
Five accused Afinsa executives include the president, Juan Antonio Cano Cuevas, the president of honour, Albertino de Figueiredo Donastimento, the deputy director of investments, Carlos de Figueiredo Escrivá, the deputy director of investment contracts Vicente Martín Peña, and the director of accounting up to 2003, Emilio Ballester.
Stamp dealer Francisco Guijarro Lázaro was also arrested.
The court papers said between 2000 and 2002, Afinsa bought stamps for EUR 57.8 million and sold them for EUR 723.5m.
This represented a mark-up or overvaluation of 1,000 percent.
[Copyright EFE with Expatica]
Subject: Spanish news