Details of an alleged international olive oil scam – in which palm, avocado, sunflower and other cheaper oils were passed off as olive oil – were released today by Spanish police.

They said the oils were blended in an industrial biodiesel plant and adulterated in a way to hide markers that would have revealed their true nature. The oils were not toxic, however, and posed no health risk, according to a statement by the Guardia Civil.

As previously reported in Olive Oil Times, 19 people were arrested last week following the year-long joint probe by the police and Spanish tax authorities, part of what they call Operation Lucerna.

Fifteen of of those arrested are Spanish, two are Ecuadorian, one is Colombian and another Italian.

Police said today the alleged fraud involved a complex network of 30 companies and ‘straw men’ from Spain, Italy and Portugal, and an estimated €3 million ($4 million) or more IVA (Spanish VAT) fraud.

The investigation focused on locations in Jaén and Córdoba, however, and police seized documents after searching four business premises in the former.

They believe that false documents and holding companies were used to sell the adulterated oil for human consumption via two main methods: bulk sales to unwitting third party businesses and sales of bottles labeled as olive oil.

“This illegal practice causes very serious unfair competition in the sector given that, by not paying VAT and using inferior or other vegetable oils, the organization was able to price the product well below the market rate,” the police statement said.

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