The Palma court is judging a construction entrepreneur and his partner for an alleged fraud of over half a million euros from Social Security. The prosecution is seeking four years in prison for each and a fine of €1.7 million.
A builder from Mallorca and his partner are facing trial in the Palma court for an alleged massive fraud against Social Security. The prosecution claims that, between 2018 and 2021, they devised a network of companies to evade the payment of their workers' contributions, generating a debt of €599,083. For each of them, the public prosecutor requests four years in prison, a fine of €1.7 million, and a ban from the construction sector for four years.
The corporate network: three companies to evade debt
According to the accusation, the 44-year-old entrepreneur and his 43-year-old partner implemented a plan when the first of their companies, José Luis Baleares SL, began to accumulate debts with Social Security. Instead of formally liquidating it, they ceased its activity and created new businesses to continue operating. In this way, the new companies could obtain negative debt certificates and operate normally, while the debt of the previous company remained uncollected.
The network had several formal offices, both in Calvià and Palma, to appear as independent companies. However, they all operated from the same office, shared clientele, suppliers, material resources, and, above all, the same workers. The first company had up to 92 affiliated employees before deregistering it in May 2019.
The modus operandi: changing companies, maintaining the business
The prosecution details that, after creating the first company in 2013, it began to incur debts in 2018. At that point, the couple created new companies to continue operating without the burden of debt. In this way, workers moved from one company to another, but the contributions to Social Security from the first were never paid. The prosecutor considers that this system constitutes a crime against Social Security, as it was the same economic activity disguised under different legal identities.
The total debt claimed, €599,083, includes surcharges and interest generated since 2018. The accusation requests that both compensate the General Treasury of Social Security with that amount. Additionally, it seeks that they lose the right to subsidies and tax benefits for six years, and that they be disqualified from any profession related to construction for four years.
Local impact: a fraud that affects the island's workers
This case highlights a practice that, according to union sources, is not uncommon in the Balearic construction sector. The non-payment of contributions leaves employees without Social Security coverage, affecting their unemployment benefits, sick leave, and future pensions. In this case, the 92 workers of the first company were harmed by the non-payment of their contributions, although the investigation has not detailed whether all of them were able to regularise their situation.
The trial, which is taking place in the Palma court, is expected to last several days. The couple faces sentences that, if convicted, could lead to their imprisonment. The court will have to determine whether the corporate network was a mere fraud or a deliberate strategy to evade labour obligations.
For the island's residents, this case is a reminder of the importance of companies fulfilling their obligations. Social Security has intensified controls in recent years to detect such practices, especially in sectors like construction, where temporality and subcontracting are common. The outcome of this trial could set a precedent in the fight against labour fraud in Mallorca.
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