Paramedics battled to save the notorious criminal, once dubbed one of Britain's richest crooks, but he died at the scene.
Palmer, 64, was jailed at the Old Bailey in 2001 after amassing an estimated £300 million in a massive timeshare fraud which ripped off thousands of British holidaymakers.
Spanish authorities believe he continued to run the crime empire from his U.K. prison cell and had recently charged him with fraud, firearm possession and money laundering. He is said to have told his friends that he was dreading returning to jail as he has recently been suffering from health problems, including a heart scare.
He had been on bail for eight years after he was arrested by armed police in Tenerife in July 2007. In May this year he was finally charged as part of a 15-year Spanish investigation.
Ten other alleged members of his criminal gang, including partner Christina Ketley and nephews Andrew Palmer and Darren Morris, were also charged.
Palmer was nicknamed Goldfinger after being accused of handling the gold from the £26million Brink's-Mat robbery at Heathrow in 1983 - a crime for which he was cleared of responsibility.
Following the high-profile trial, he moved to Tenerife, where he embarked on his timeshare scam.
He was jailed for eight years and served half of his sentence, living between Tenerife and Britain following his jail time.
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