Police in Spain have arrested three German fugitives suspected of operating a massive money-laundering system for criminal gangs, Europol said on Thursday.

"The suspects are believed to have run a shadow banking system which processed hundreds of millions of euros of criminal transactions isolated from any oversight mechanisms governing the legal financial system," Europol said.

They "moved around large amounts of cash through this parallel system, helping criminals launder their illegal proceeds and fund their activities, mainly linked to drug trafficking."

The suspects -- on the run from the German authorities since 2021 -- were arrested on March 30 in Malaga in southern Spain with the help of the German police, Europol said in a statement.

Their arrest was only made public now due to operational reasons, it added.

The ringleader -– a German citizen of Russian origin -– was one of the three men arrested.  

The ringleader would negotiate commissions of up to five percent for every million euros managed, with profits estimated at more than 250,000 euros ($265,000) per day, Europol said.

In a number of different raids in the Malaga region, police seized substantial amounts of cash, money-counting machines, encrypted mobile phones and fake IDs, it said.