Case File

Defex’s Dirty Decades: Arms Sales to Angola

Author
Jack Cinamon
Published on
October 14, 2025
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Members of the Angolan police forces: Defense Visual Information Distribution Service
Members of the Angolan police forces: Defense Visual Information Distribution Service
Members of the Angolan police forces: Defense Visual Information Distribution Service

Contents

Contents

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Introduction

Introduction

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Between 2008 and 2012, Spain’s now liquidated state-owned export promotion company Defex and its private partner Comercial Cueto 92 became entangled in one of the largest corruption scandals in Spain’s recent history. Against the backdrop of Angola’s oil-fuelled economic boom and entrenched patronage politics under President José Eduardo dos Santos, the Cueto-Defex consortium secured multimillion-euro contracts to supply Angola’s police and security forces with law enforcement equipment. What appeared to be legitimate defence deals soon drew suspicion as vast sums of public money were siphoned into offshore accounts, raising red flags with European regulators and triggering a Spanish anti-corruption investigation that later widened to several countries, including Cameroon, Saudi Arabia and more.

The allegations centred on a €152.9 million contract signed in 2008, which prosecutors found had actual costs of only €59 million. The remaining €93.9 million was allegedly funnelled into bribes and kickbacks for Angolan officials, Spanish executives, and intermediaries. Investigators uncovered a complex network of shell companies, inflated invoices, and fictitious service contracts routed through Luxembourg, Panama, Europe and Asia. The bribes went beyond cash, extending to luxury perks such as lavish Christmas hampers, paid trips and financial gifts to relatives of Angolan elites.

By 2019, the case progressed to an oral trial at the Spanish National Court (Audiencia Nacional), with Spain’s Anti-Corruption Prosecutor’s Office filing charges against 24 individuals and three companies involved, seeking multi-decade prison terms and hundreds of millions in fines. As of now, the Angolan chapter of the Defex scandal remains unresolved, with the trial in Spain still pending and no final verdict issued.

Case Details

Case details

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Seller country
Spain
Seller company
Defex
Buyer country
Angola
Goods category
Law Enforcement Equipment
Equipment sold
Police equipment including jammers
Deal value
€157 million ($243 million)
Sum involved in corruption
€93.9 million ($145.5 million)
Start year
2008
Outcome status
Trial Begun

Actors

Actors

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  • Defex S.A.: Now-dissolved Spanish company; was 51% state-owned and 49% privately held; exported defence equipment on behalf of the Spanish government, focusing primarily on arms sales; its board included ministers of defence, finance, foreign affairs, and economy. The company allegedly paid millions in bribes to secure contracts globally, including deals with Angola; founded in 1972; headquartered in Madrid, Spain; liquidated in 2022.

  • Comercial Cueto 92 SL: Defex’s private partner in the deal, responsible for securing public contracts for Defex in Angola through the payment of alleged illicit commissions, gifts and expenses to Angolan authorities and public officials; CEO is Juan Carlos Cueto; headquartered in Madrid, Spain.

  • Global Reach SA: Another Cueto company, founded in 2004 as Superleague Formula SA; Juan Carlos Cueto was director of Global Reach until 2014 when rumours of corruption first surfaced; García Paesa was director of the company from 2011-2022; allegedly received €11,086,404.10 from the police equipment contract under investigation; headquartered in Madrid, Spain; closed for business in 2022.

  • Abangol Limitada: Shell company; allegedly received €6.5 million from one of the accounts managed by García Paesa ,the money intended for Cruz Neto; registered in Benguela, Angola.

  • Gourmet Imperial: Owned by one of the companies under investigation, believed to be Commercial Cueto 92; allegedly received €2.5 million from Defex in Christmas basket gifts.

  • Deutsche Bank: Accused in the commission of money laundering in transfers to Luxembourg and Angola from various accounts.

  • Caixabank: Accused in the commission of money laundering in transfers to Luxembourg and Angola from various accounts.

  • BNP Paribas: Accused in the commission of money laundering in transfers to Luxembourg and Angola from various accounts.

  • José Ignacio Encinas Charro: President of Defex (1991-2013).

  • Manuel Iglesias Sarriá Fernandez de Navarrete: Commercial Director of Defex (2004-2013) and Director of Operations (2014) of Defex.

  • Ángel María Larumbe Burgui: Retired Colonel and former Operations Director of Defex.

  • Juan Carlos Cueto Martín: Leader of the Cueto Group, and CEO of Comercial Cueto 92; former Director of Global Reach, directed payments to Angolan officials and managed shell companies.

  • Iciar de Yraola Lachiondo: Executive at Comercial Cueto 92; wife of Cueto Martín.

  • Alejandro Moreno Robert: Executive linked to Comercial Cueto 92.

  • Enrique Francisco Gómez Cuesta: Former Financial Director of Defex; Supported the criminal strategy and fund distribution.

  • Ana Cerrolaza Gili: Executive linked to Defex.

  • Beatriz García Paesa: Consultant and lawyer; allegedly set up business structures to hide money, moving funds from Luxembourg to accounts worldwide, and managed shell companies for laundering; niece of Spanish spy Francisco Paesa, linked to the “Laos papers” in the Roldán case, and notorious for faking his death in the 1990s; Beatriz has been a close friend of Cueto since childhood.

  • Guilherme Augusto de Oliveira Taveira Pinto: Portuguese intermediary; former Defex representative in Luanda, Angola; allegedly managed illicit payments to Angolan officials; known as “el comprador” of Angolan contracts, he set up shell companies and prepared false invoices to disguise payments; fugitive from justice.

  • General Armando da Cruz Neto: Former Deputy Minister of Defense; Chief of General Staff of the Angolan Armed Forces (2001-2003); Angolan ambassador to Spain (2003-2008); Governor of Benguela, Angola (2008-2013); considered as the main Angolan beneficiary; allegedly received €6.5 million in return for securing the deal; his daughter received €25,000.

  • Ambrósio de Lemos Freire dos Santos: Chief Police Commissioner (2006-2017); two companies covered his medical and accommodation expenses in Madrid; allegedly pocketed €3 million.

  • Ana Freire: Wife of Lemos Freire dos Santos, allegedly received expenses and payments worth over €280,000 through a Swiss bank account along with an unidentified family member.

  • General Demóstenes Amós Chilingutila: Former Chief of Staff of the Armed Forces for the Liberation of Angola (FALA), the armed wing of UNITA; former Deputy Minister of Defense for Material Resources in the then Government of Unity and National Reconciliation (1996-2008); former deputy of the National Assembly (2008-2017); recipient of “Christmas baskets” offered by Defex; his son allegedly received €5,000 through an account in Paris, France; died in 2021, aged 73.

  • General José João "Maua,": Member of then-President José Eduardo dos Santos's Security Unit (USP), reported involvement in the scheme.

Timeline

Timeline

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2008
  • 12 JunContract signed in Luanda, Angola, between Cueto-Defex Temporary Business Union (a Spanish Unión Temporal de Empresas, or UTE) and the General Command of the National Police of Angola for €152,991,438.70 million in police equipment. By means of an order from the Ministry of Finance of Angola, signed by Eduardo Severim de Morais, the full amount was transferred from the entity Export–Import Bank of China in Beijing, to Deutsche Bank of Madrid, Spain, before the full amount was released to a current account owned by the Cueto-Defex consortium. Only half of this shipment of police equipment apparently arrived.
  • Out of the total contract money, €41,464,729.48 was sent to Luxembourg, and only €35,053,575.87 was actually paid to Spanish companies that supplied the vehicles. The only money that could be clearly tracked was the combined €76,518,305.35.
2009
  • Contract signed for the supply of police equipment, worth nearly €2 million, to the Presidential Security Unit for Pope Benedict’s visit to Angola in 2009.
2011
  • Contract signed for the supply of jammers to the Presidential Security Unit, worth nearly €2 million.

Outcomes

Investigation Outcomes

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2012
  • A Spanish investigation into the Angola deal was triggered by a warning from Luxembourg authorities to Spain’s anti-corruption prosecutors regarding a suspicious money transfer worth more than €41.4 million, revealing suspect operations in Egypt and several South American, Asian and Gulf countries.
2013
  • Proceedings opened by the Spanish Anti-Corruption Prosecutor’s Office.
2014
  • Defex came under investigation by Spain’s Anti-Corruption Prosecutor’s Office after suspicions arose regarding its dealings in Angola. The investigation later extended to several countries, including Algeria, Brazil, Cameroon, Egypt, Gabon, Saudi Arabia and Senegal.
  • 11 MarThe first suspect, Guilherme Augusto de Oliveira Taveira Pinto, agrees to be questioned in Luxembourg regarding his role as a fixer for Defex in Angola. Taveira Pinto showed up punctually, made a statement exonerating himself, and then vanished. There was too little evidence to arrest him.
  • NovAs rumours began to stir around the deal, former Angolan Ambassador to Spain, Armando da Cruz Neto, sent in a statement to the Angolan weekly Novo Journal denying having received any bribes in relation to the deal.
2016
  • JulAfter eventually gathering enough evidence, the Portuguese police went to arrest Taveira Pinto at his home on the outskirts of Lisbon, in the discreet town of Linda-a-Velha , but the officers found the house empty. An international arrest warrant was issued to Interpol by the National Court.
  • 16 OctSpanish Newspaper El Mundo locates Taveira Pinto hiding out in Luanda, Angola. However, Spain does not have an extradition agreement with Angola.
2018
  • 13 JulThe 5-year long investigation revealed that the €152.9 million police equipment contract had real costs of only €59 million (38.6%), leaving €93.9 million (61.3%) reportedly used for profit and bribes. However, only part of this profit reached the company with the rest siphoned off to Angolan officials and Spanish defendants through a maze of shell companies, inflated invoices, and false service contracts.
  • Judge José De la Mata outlined that UTE Cueto-Defex distributed its funds as follows: one-third for acquiring and supplying materials, one-third as profit for Comercial Cueto and Defex, and one-third ostensibly for “local services” in Angola; services which were never provided, with the money instead diverted elsewhere.
  • Simply put, the purpose of the Cueto-Defex joint venture was to secure contracts by paying bribes and commissions to Angolan officials. These payments were facilitated through inflated invoices, fictitious companies and false service contracts worth tens of millions of euros.
  • Among the charges is corruption in international transactions, added to Spain’s Criminal Code in 2003 under the OECD Anti-Corruption Convention.
  • The judge finds “solid and consistent evidence” that every Angola deal through Cueto-Defex “consisted of obtaining public contracts for the public company Defex SA through the payment of illicit kickbacks to Angolan authorities and public officials.” He also noted payments to agents and ‘along the way’ executives who took “advantage of the absolute lack of crime prevention mechanisms… to appropriate multimillion-dollar sums from the UTE contracts for personal gain.”
  • The ruling also cites the role of Deutsche Bank, Caixabank, and BNP Paribas in money laundering: over €41.4 million was transferred to Luxembourg and Angola without any anti-laundering checks.
  • At least €52.3 million was misappropriated by UTE Cueto-Defex with €41.4 million confirmed as bribes to Angolan officials. The misuse of funds included: (i) €2,593,044 (2008–2012) spent on luxury Christmas baskets through Gourmet Imperial, owned by one of the companies under investigation, most likely to be Cueto Comercial. (ii) Paid trips, accommodations, and assistants for Angolan celebrities. (iii) Payments to children, spouses, and relatives of Angolan officials.
  • 27 people were prosecuted, including executives of both Defex and Comercial Cueto. Bank employees were also accused of enabling the scheme, although their names remained disclosed.
  • Among the names, Comercial Cueto director Cueto Martín, Defex President Encinas Charro, Defex Operations Director Larumbe Burgui and Defex Commercial Director Manuel Iglesias Sarria were regarded as the "authentic leaders of the organisation", with the support of Comercial Cueto executives Iciar de Yraola Lachiondo and Alejandro Moreno Robert, and Defex executives Enrique Francisco Gómez Cuesta and Ana Cerrolaza Gili.
  • Angolan officials included prominent figures such as former Chief Police Commissioner Ambrósio de Lemos and former Angolan Ambassador to Spain, Armando da Cruz Neto. Cueto even attended Cruz Neto’s daughter’s wedding, where Cueto made a gift of €25,000 to the daughter’s current account in Rome, Italy, attesting to the close relationship. General Cruz Neto’s compensation was linked to his company Abangol Limitada. General Demóstenes Amós Chilingutila was also mentioned in the investigation, albeit because of his son, who was not revealed, but had been accused of receiving €5,000. Although not disclosed by court documents, a member of then-President José Eduardo dos Santos's Security Unit, known as General "Maua” has also been reported as involved.
  • However, the judge spotlighted two key players: García Paesa and Taveira Pinto.
  • Paesa, lawyer and consultant, was responsible for "implementing the agreed-upon strategy, designing and launching the entire corporate structure, effectively identifying and managing a group of professional money launderers in Luxembourg, supervising the management of the companies, directly assuming responsibility for a large part of the falsification of invoices and documents, and distributing the illicit funds obtained". She set up a complex network of shell companies through the infamous, Panamanian law firm Mossack Fonseca (she was consequentially named in the Paradise Papers), before diverting money to Hong Kong, Singapore, Italy, France, Switzerland, the United Kingdom, the Cayman Islands, and Luxembourg. These accounts were used to pay Angolan authorities and public officials.
  • Taveira Pinto, a Portuguese citizen and Defex representative, served as the liaison with Angolan authorities and the manager of all illicit payments to Angolan authorities and officials. Judge De la Mata also accused him of being responsible for "setting up and managing a large part of the fictitious corporate structure and issuing all kinds of false invoices to cover the payments." Furthermore, he suspects Taveira Pinto received the millions stolen from the contracts.
  • The case also uncovered other irregularities: nearly €2 million in police equipment supplied to Angola’s Presidential Security Unit during the Pope’s 2009 visit, and further police supplies worth nearly €2 million in 2011.
2019
  • 1 MarThe Prosecutor's Office filed a disclosed 213-page provisional indictment against 27 individuals and three companies linked to the Defex arms and security equipment sales business. They stand accused of money laundering, organised crime, corruption in international business transactions, and embezzlement of public funds, among other offenses.
  • The prosecutor is seeking 50 years and seven months in prison for Defex’s former commercial director, Iglesias-Sarria, the same as for the company’s president, Encinas Charro; while requesting 44 years and 7 months for former Defex Financial Director Enrique Gómez Cuesta.
  • Through this operation, Encinas Charro and Larumbe Burgui are said to have appropriated €1,520,024 from Defex.
  • Also charged are former operations director and reserve colonel Ángel María Larumbe, for whom 35 years is requested; lawyer García Paesa, accused of orchestrating the embezzlement and laundering scheme, with a 50-year sentence requested; businessman Cueto Martín, facing 50 years; and his wife, Iciar de Yraola, facing 44 years.
  • It is unlikely Taveira Pinto will face trial as he is a fugitive and has a national and international arrest warrant out for him; the judge ratified his arrest warrant and imprisonment.
  • The Prosecutor's Office is seeking a €315 million fine from Defex as a legal entity for the crime of corruption in international commercial transactions. For two offenses against the Public Treasury, it is also seeking a six-month fine from the company. For Comercial Cueto it is seeking total liability of over €382.1 million, and a fine of €9.1 million for Global Reach. In its provisional conclusions, the Anti-Corruption Office accuses Defex of crimes against the Public Treasury, embezzlement, misappropriation of funds, money laundering, document falsification, corruption in international commercial transactions, and organised crime.
  • The prosecutor’s investigation found that, beyond paying tens of millions of euros in bribes, the defendants also arranged perks including surgeries, medical care, hotel accommodations and chauffeured transport.
  • The Angolan Attorney General’s Office closed any investigation into the contract.
  • 3 MayNational Court Judge José de la Mata files a provisional indictment, naming 27 individuals and 3 companies.
  • 20 MayThe case progressed to an oral trial. National Court Judge José de la Mata opens the trial against the three companies and the 24 individuals, including the former executives of the entity, for the alleged embezzlement and misappropriation of funds from contracts to supply police equipment to Angola. Defex and former managers are to stand trial on charges they set up a complex bribery and embezzlement system for contracts signed in oil-rich Angola.
  • As of the current date, no final verdict has been issued for the Angolan addition in the Defex scandal series; the trial was expected in 2024 but remains pending. Angolan authorities have given no sign of reopening an investigation into the case.

References

References

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