Nine people have been arrested in Madrid and Valencia, including a Colombian who ran the extortion operation from jail.
The network made its money through intimidating people who had alleged debts to Colombian drug traffickers in Spain, and taking 35% of whatever was recuperated.
Spanish police also recovered an UZI submachine gun with silencer, two pistols, a small marijuana plantation and a home-made cocaine processing laboratory.
Investigations began last year following accusations made by a person who owed an alleged debt and had abandoned his family, home and work for fear of reprisals.
The office was run by a Colombian in jail in Madrid on drug trafficking charges.
A home in the Madrid suburb of Mostoles was used as a meeting point for the group. As well as collection work, some also made money from medium-scale marijuana and cocaine trafficking.
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