The Supreme Court has recently issued its Judgment no. 277/2018, of June 8, in which it partially upheld the appeal filed by the representations, among others, of Mr. Ignacio Urdangarían Liebaert and Mr. Diego Torres Pérez against the Judgment issued by the Provincial Court of Palma de Mallorca on February 17, 2016, which convicted, among others, the aforementioned Ignacio Urdangarín Liebaert as the author of the crimes of prevarication, embezzlement of public funds, fraud against the administration, influence peddling and 2 crimes against the Public Treasury, although it acquitted him, among others, of the crime of money laundering.
You can download the aforementioned Supreme Court Ruling at the bottom of this article.
In its Ruling, the Supreme Court reduced the sentence imposed on Ignacio Urdangarín Liebaert to 5 years and 10 months in prison, thus reducing by 5 months the prison sentence imposed by the Provincial Court, as the High Court acquitted him of the continuous crime of falsification of public documents and appreciated the mitigating circumstance of repairing the damage with regard to the crimes of prevarication and embezzlement of public funds, and also replaced the amount with which he must compensate the Public Treasury with a lower amount.
In the case of Diego Torres Pérez, the Provincial Court of Palma de Mallorca convicted him for a crime of prevarication and embezzlement of public funds, fraud against the administration, influence peddling, a crime against the Public Treasury and also for a crime of money laundering, although the High Court acquitted him in cassation, among others, of this last crime.
Finally, the Supreme Court in its Judgment dismisses the appeal filed by Jaume Matas Palau and leaves without effect the liability of Ana María Tejeiro Losada and Cristina Federica de Borbón y Grecia as participants for profit, exclusively with regard to the amounts established as compensation for the crimes against the Public Treasury, which must be paid exclusively by those criminally convicted, maintaining the rest of the pronouncements of the Judgment issued by the Provincial Court.
Focusing the analysis of Supreme Court Ruling No. 277/2018, the subject of this article, on the crime of money laundering, we must point out the main lines of argument sustained by the Supreme Court in this regard, mainly in its “Forty-fourth” ground of law, when resolving the fifth ground of appeal raised by the representation of Diego Torres Pérez, which it ends up up up upholding, and, therefore, revoking the conviction of the Provincial Court’s Judgment with respect to the crime of money laundering.
The Provincial Court of Palma de Mallorca based its conviction of Diego Torres for the crime of money laundering fundamentally on the handling of funds through accounts and companies located outside Spain, funds that were connected to the amount defrauded for personal income tax in the year 2007.
The Supreme Court affirms that “the sentence constructs the crime of money laundering by abstracting from the crime of embezzlement of public funds”, however, it affirms that no laundering actions are attributed to the embezzled funds, funds with full appearance of legality and that did not need to be laundered. Furthermore, the Court affirms that “there is a relevant temporal distance between the obtaining of the funds and the movements that the Court considers to be laundering operations”.
The High Court raises a question in relation to an issue that has been the subject of intense doctrinal debate: does the investment or handling of the amount of the dues defrauded from the Public Treasury in the form of evasion of the payment of taxes represent or may represent a crime of money laundering of art. 301 CP? The Court settles the question by pointing out the precedent of the Ballena Blanca case, which it already resolved in the affirmative in its STS 974/2012, of December 5.
Despite the fact that the aforementioned Ruling 974/2012, supports the thesis in favor of conferring to the crime of tax fraud suitability to become a predicate offense for money laundering, in the Ruling that is the subject of this analysis the Supreme Court recalls that, nevertheless, the aforementioned Ruling (974/2012) outlines some strict conditions to justify a conviction with that presupposition.
The Court continues to support the non-existence of the crime of money laundering by Mr. Diego Torres Pérez, stating that “It is not enough to commit a crime of tax fraud for, immediately and from that moment on, any investment, expenditure, use or transfer of money, acquisition… to become a crime of money laundering”. And the High Court points out two main requirements of this criminal type, which are:
“In order to be considered a laundering offense, it will be necessary, on the one hand, that the operations involved have a detectable specific purpose of concealing the illicit origin.
On the other hand, that a clear link can be established between the flow of money handled and the amount defrauded”.
Likewise, the High Court states that an automatic link can no longer be established between the money or funds handled and the previous criminal activity. This does not contaminate the entire patrimony, which, by necessity, has to be broader. It only contaminates strictly a part, a quota, the figure to which the tax fraud amounts. And he concludes that: ” Not all of the tax fraudster’s money comes from a crime. Only a part of it can be labeled as such: the equivalent to the amount defrauded. “(…) “Only with respect to that figure can its criminal origin be affirmed”.
On the other hand, the Court argues that the crime of laundering requires an intention to conceal the origin in order to pass off the income as legitimate and, therefore, only then will there be laundering. Simply spending or investing the defrauded amount, if its amount has the appearance of a legitimate, legal collection, cannot be a crime of art. 301 CP (which the Court says would be “dirty” but not “black” money).
Here we must emphasize, as does the Judgment under comment, that the case law of the Supreme Court has recognized that the crime of money laundering is not consummated with the simple enjoyment, expenditure or transmission of the proceeds of crime, but requires that the operations are carried out with the specific purpose of concealing or disguising the criminal origin (subjective element). In support of this argument, he cites STSS 1080/2010, of October 20, 265/2015, of April 29, 699/2015, of November 17, 693/2015, of November 12, 690/2015, of October 27 and 583/2017, of July 19.
Likewise, the Court relies on its Judgment 182/2014, of March 11 (Reparaz case) which also does not appreciate the commission of a money laundering offense.
The Court points out that it is essential to be able to establish a link between the amount defrauded and the expenses or investments made, and the link cannot be established without reasoning, in a capricious, voluntary or arbitrary manner, maintaining, without further justification, that some investments or movements refer precisely to the amount defrauded, when the fraudster has carried out many other expenses not constituting laundering, that is to say, lawful expenses. And in this regard the High Court asks (in our opinion correctly) why it is not these lawful and legitimate expenses that have absorbed the defrauded quota?
Indeed, in the case at hand, the Judgment argues that the Provincial Court of Palma de Mallorca has not provided arguments that rule out these possibilities and that show in a minimally conclusive manner that the money handled through the accounts represented, at least in part, the defrauded quota. In short, the Provincial Court of Palma de Mallorca has not accredited this link that would be essential for the assessment of the crime of money laundering.
For all these reasons, the Supreme Court in the Judgment under analysis, with the fifth ground of appeal of Mr. Diego Torres Pérez being upheld, acquits him of the crime of money laundering (also of the crimes of falsification of public documents and influence peddling) for which he was convicted by the Provincial Court of Palma de Mallorca, reducing the sentence imposed on Mr. Torres Pérez to 5 years and 8 months imprisonment, also substituting the fine imposed for the crime of tax fraud and the amount with which he must compensate the Tax Authorities to a lower amount. Torres Pérez to 5 years and 8 months imprisonment, substituting, likewise, the fine imposed for the crime of tax fraud and the amount with which he must compensate the Public Treasury to a lower amount.
