March 13 (Bloomberg) -- Spanish police arrested 41 people suspected of involvement in laundering more than 250 million euros ($337 million) that the nation's Interior Ministry said may include funds from Russian oil company OAO Yukos Oil Co.

Seven lawyers and three notaries were among those arrested, the Madrid-based ministry said in an e-mailed statement yesterday. Spanish, Moroccan, French, Finnish, Russian and Ukrainian nationals were taken into custody, the government said.

The police may have found the destination of ``significant flows of money coming from a massive illegal siphoning of funds'' from Yukos, the Interior Ministry said. London-based Yukos spokeswoman Claire Davidson told Bloomberg News today that the company would be ``very surprised'' if people at Yukos were connected with money laundering.

The money laundering ring is the largest discovered in Spain so far, the ministry said. The arrests followed 18 months of investigations involving more than 300 police agents, including members of Interpol and Europol as well as local police.

The group may have been laundering more than 600 million euros, El Pais reported today, without saying how it got the information.

The ring helped criminal groups invest their profits in real estate on the southern coast and elsewhere in Spain, the Interior Ministry said, adding that the police may make more arrests in relation with the case.

The arrests were made across the southern coast, and police investigated 18 homes and offices in Spain, as well as locations in the Netherlands and Russia. The investigation, which began in September 2003, was referred to as ``Operation White Whale.''

Land, Planes Seized

The police have seized 251 plots of real estate and bank accounts with ``several tens of millions'' of euros, as well as 42 luxury cars, two private planes and a boat, the government said. They also have found several trucks of documents and hard disks from computers, the government said.

The Interior Ministry said it appears that a ``significant'' amount money taken from Yukos was diverted to a company in the Netherlands, which then invested the money through a Spanish unit. Spain has been in contact with Russia's police and justice system regarding the investigation. No one was identified by name in the ministry's statement.

Russia in December sold Yukos's largest oil production unit, OAO Yuganskneftegaz, to pay part of a $28 billion tax bill, the country's largest ever.

Spain's probe into money laundering centered around a law firm based in Marbella, on the country's southern coast, which provided services to at least nine organizations, the Interior Ministry said. The law firm helped set up companies to send money to locations and countries where the money wouldn't easily be tracked, the government said, without naming the law firm.

``This tourist destination area is seen by criminals not only as a good place to live and relax, but rather as a zone that offers services to launder and hide money,'' the government said in the statement.

To contact the reporter on this story: Thomas Mulier in Madrid at tmulier@bloomberg.net.

Last Updated: March 13, 2005 06:17 EST