Madrid (EFE) massive frauds” for years and defrauding franchisees.
After seven years of investigation in the National Court and a file revoked, Judge Manuel García Castellón has prosecuted almost fifty people for crimes such as belonging to a criminal organization, fraud, misappropriation and money laundering, according to the order to pass to abbreviated procedure , to which EFE has had access.
Among those prosecuted stands out the former owner of the company, Ernesto Colman, who spent 15 months in pretrial detention for this cause, and his “trusted agent” in several companies, Bartolo Conte, whom the judge places at the head of an “organized structure ” from 2005 until the investigation began, according to the order, against which there is an appeal.
“Mass fraud and laundering of profits”
The “ultimate objective” was “the commission of massive fraud (of a tax and contractual nature) and the laundering of profits” in the framework of an operation in which “franchisor companies, franchised companies and accounting, tax, labor and services, with a spatial scope not limited to Spain”, which extended to the Netherlands, Switzerland and Luxembourg.
The judge recounts in his order how Colman would have created a “corporate and franchise structure” that gave rise to “an abusive model that would seek the enrichment of the organization” through different ways, such as the imposition of extra costs on franchisees or ” the diversion of the advertising fee paid by the franchisees for other purposes”.
Contrary to what was advertised, says the judge, the benefits or discounts that the brand obtained did not redound to the franchisees, who were forced to pay a royalty of 11%, which translated into an increase in the price they had to pay and “In the case of prostheses, in a decrease in their quality.”
Each clinic generated a monthly amount in B
The judge highlights the existence of an alleged B accounting that generated “large amounts of fiscally opaque money.” The way of operating presumably consisted of each clinic being able to generate the chosen monthly amount in “B”, having to deliver “10% of what was ‘blackened’ to the organization”.
For this, the order explains, “a cash collection system” would have been established, which was delivered in cash at the annual meetings of the franchisees, although the payment of 10,000 euros per month in cash would also be required “to the clinics own and some trusted franchisees”.
The judge has detected the setting of prices higher than those of the market in some products through a computer program or through the prohibition of making discounts “to patients other than those authorized.”
To illustrate the supposed extra cost, the judge explains that if, for example, a clinic placed 500 crowns on implants, the price that the Vitaldent laboratory charged for the crown was 55,500 euros, while the price that another laboratory would have charged was 27,500 euros. , “from which a notable benefit is extracted for the head office to the detriment of the franchisee.”
Some franchisees had better conditions
It has also verified the existence of “collaborating franchisees” who would have cooperated with “the criminal organization” to the detriment of the rest of the franchisees. In exchange, “better conditions were established for them.”
With this structure, Colman would have contracted with franchisees from Spain, Italy, Poland and Portugal “conditions that allowed him to obtain great benefits by managing all phases of training, advertising, leasing of premises, implant material, suppliers, franchise fee payment “, etc.
In October 2021, the judge closed the case, which arose from a complaint by Vitaldent franchisees, considering that the fraud had not been proven, but two months later, the Criminal Chamber revoked that decision, understanding that there were “solid indications of allegedly criminal commission.”