Leadership of Spain’s largest collectibles company sentenced in massive fraud case

A group of executives that formerly worked for the Spanish collectibles company Afinsa—at one point the world’s third largest collectibles company—was sentenced to prison after duping more than 150,000 small-scale investors into a fraudulent pyramid scheme.

Earlier this year, a Spanish court ruled Afinsa ex-president Juan Antonio Cano; founder Albertino de Figuereido and son, Carlos; former CEO Vicente Martín; ex-accountant Emilio Ballester; and supplier Francisco Guijarro illegally duped small-scale investors—many of them elderly—into staking their life savings on a supposedly high-yield philatelic venture.

The judge of the Feb. 14 ruling explained Afinsa sold so-called “rare stamps” to investors, who were guaranteed six per cent annual interest but eventually saw their investments vanish. About 80 per cent of the victims invested less than 20,000 euros while about a dozen people invested more than a million euros.

The court heard Afinsa’s sales representatives would recommend investors to persuade their relatives, friends, neighbours and even acquaintances to join the scheme. The company also promised investors it would re-acquire the stamps for a higher price at a later date.

The court also heard many of the stamps were counterfeit while their prices were significantly overvalued. While Afinsa acquired the stamps from Guijarro at eight per cent of their catalogue value, the stamps were re-sold at a profit of up to 1,150 per cent. In two years, Afinsa spent 57.88 million euros on stamps, which were then sold for 723.55 million euros.

The judge, who called Afinsa’s business model “untenable,” said the company’s actions increased its deficit equity resulting in missing revenue of 2.6 billion euros (more than $4 billion Cdn.), which spurred an investigation resulting in the arrest of Afinsa’s leadership more than a decade ago.

CHARGES, PRISON TIME

According to a story published by The Local, Afinsa’s former executives were sentenced to various prison terms for charges ranging from aggravated fraud to money laundering, false accounting, bankruptcy fraud and tax crimes.

Ex-president Cano was sentenced to eight years and seven months in prison while founder Figuereido and former CEO Martín were sentenced to more than eight years in prison. They also each received fines of more than 100,000 euros.

Ex-accountant Ballester was sentenced to eight years and four months in prison while supplier Guijarro was given a two-year sentence and a fine of 17.7 million euros for money laundering. In only five years of working with Afinsa, Guijarro went from being unemployed to amassing more than 30 million euros.

Afinsa previously boasted about 175,000 clients; 100 offices across the world; 2,600 employees; and a profit of 51 million euros.

 

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