The Provincial Court in Madrid will begin to hear evidence from today, Thursday, against the steel magnate José María Aristrain for an alleged crime of confiscation of assets for which the Public Ministry requests a sentence of 4 years in prison and a fine of 12,000 euro.
According to the indictment the events are related to corporate movements that the businessman is alleged to have carried out to prevent the Tax Agency from auctioning a property located on calle Zurbano in Madrid in order to recover a share of Unpaid IVA of more than 661,000 euro.
The matter dates back to 1998 when Aristrain established the company Pioninin SL, of which he was the sole director holding 99.9%. Although the corporate purpose was “the purchase, sale, rental, subdivision and urbanisation of plots, land and farms, as well as the purchase, subscription, possession, exchange and sale of securities”, the Prosecutor’s Office points out that “its immediate purpose was the acquisition of a property located on calle Zurbano (…), a single-family home of 1,969 square metres” and that this house was its only asset.
In 2012, a second company – Corporación JM Aristrain SL – of which the accused was a partner and sole administrator, began to hold 100% of the shares of Pioninin SL in compensation for a recognised credit.
But between 2005 and 2012, a series of works were carried out on that property on calle Zurbano that led to the Tax Agency starting an inspection. This resolved that the IVA on the invoices for these reforms was not deductible for Pioninin SL and concluded with a regularisation that extended to the IVA accrued by the company during the years 2009, 2010 and 2011, in which an undeclared fee was discovered by amount of €661,296.24, of which €540,573.38 corresponded to instalments, and €120,722.86, to interest.
In anticipation of this tax execution, according to the prosecutor’s account, Aristrain – as administrator of Pioninin SL – approached a notary in December 2012 and granted a special power of attorney in favour of co-accused DQP, for which The Public Ministry requests another 4 years in prison as a necessary cooperator.
According to the Prosecutor’s Office document, both of them, by mutual agreement and with the intention of making the Tax Agency’s execution unsuccessful, signed a deed of sale of the property by virtue of which Aristrain acquired the property by purchasing it from Pioninin SL for a price of 5.5 million euro plus 220,000 IVA – the payment of which was fully deferred for a period of 5 years, without any guarantee or additional requirement, nor being raised to registration -, thereby leaving the company without any assets.
The tax debt that was pending on Pioninin SL resulted in an embargo on the Zurbano plot but when the auction was going to be held, Aristrain opposed a third party of ownership, which is a resource that allows reclaiming assets or rights that have been seized from a debtor, but which actually belong to a third party.
This frustrated the execution by the Treasury since it meant that in reality Pioninin SL did not have any assets with which to respond. However, the prosecutor points out that on January 24, 2022, that company deposited the amount of 120,000 euro into the Tax Agency on account of the outstanding debt.
This being the case, and although legal sources indicate that it is possible that a resolution will be reached in the trial on Thursday, at the moment the Prosecutor’s Office is requesting 4 years in prison for each of the accused and that “the nullity of the sale carried out fraudulently be declared”.
This is not the first time that the businessman has faced trial. In fact, in 2022 the same Section number 2 of the Provincial Court of Madrid that will now judge him acquitted him by not “considering it proven” that the accused “pretended” to live outside Spain between 2005 and 2009, for which he would have defrauded to the Public Treasury a total of 211 million euro. On that occasion, the Prosecutor’s Office requested a sentence of 64 years in prison for him.
In that ruling, the magistrates indicated that the evidence presented was “insufficient.” “If it has not been proven that he was a resident in Spain, nor that he managed said company from Madrid, there is no reason to consider that he was obliged to pay such taxes,” they noted.
The Public Ministry had accused Aristrain in its indictment of up to fifteen crimes of tax evasion, while demanding that he pay civil liability of 210,980,706.23 euro and the imposition of a fine that would be around 1,2 billion euro.