Stamp investing scandal in Spain

Top executives of the collectibles trading dealers Afinsa and Forum Filatelico are in custody after a Spanish investigating judge determined that there is probable cause to charge them for defrauding an estimated 343,000 people in an alleged scheme involving postage stamps. Clients of the two companies were promised high interest returns in exchange for purchasing the stamps. Spanish authorities believe the conspiracy bilked these small-time investors of more than 5 billion euros.

The investigation got underway about a year ago after a complaint was filed with Spanish prosecutors. Authorities believe that the heads of Afinsa and Forum Filatelico laundered hundreds of thousands of their clients’ money. Last week, investigators said that both collectible trading dealers are on the verge of bankruptcy. Nevertheless, the directors lived in fabulous estates, bought purebred horses, traveled extensively, and owned homes in different countries. Even when police carried out their raids during a nationwide sweep, authorities reportedly uncovered 10 million euros in cash stashed in a concrete vault in one of the directors’ homes.

When the arrests were announced, clients stormed the offices of both trading dealers through Spain demanding their money but the police had closed the doors. Philately experts had warned that the stamps sold by Afinsa and Forum Filatelico were highly overpriced.

After Christie’s and Sotheby’s, Afinsa was the third largest trading collectibles dealers in the world. Spain’s guaranteed deposit insurance laws don’t cover investments made by these non-financial entities so clients of Afinsa and Forum Filatelico may have lost millions. Prime Minister Jose Luis Rodriguez Zaptero promised changes to the existing laws, and said that the government was studying ways how to help the investors get back their money.