Five gang members have been jailed for 15 years for stealing £17m of taxpayer’s money in a complicated ‘missing trader’ VAT fraud.
During a four and a half year investigation, criminal investigators from HM Revenue & Customs (HMRC) broke the multi million pound fraud, centred on the mobile phone industry. VAT claims to steal a further £5m had been made, but these were stopped from being paid. Paperwork recovered during house searches showed that the gang were planning on a further fraud to steal an additional £300m of VAT from the public purse – this plot was foiled.
Gary Lampon, Assistant Director of Criminal Investigation for HMRC said after the case: “This was organised fraud on a massive scale used to blatantly fund the extravagant lifestyles of this criminal gang at the expense of the British taxpayer. ‘Missing trader’ fraud is not merely a paper fraud, it is organised crime and we are determined to pursue and bring to justice the criminals behind this type of fraud and confiscate the proceeds of their crimes.”
The gang used the proceeds of their crime to purchase high value items in cash including:
* Several UK properties worth over £1m each
* Performance cars including a Rolls Royce Phantom for £250,000 and a Ferrari for £165,000
* A property in Spain valued at over £1million
Background
In its simplest form this type of fraud involves obtaining a VAT registration number in the UK for the purposes of purchasing goods free from VAT in another EU Member State, selling them at a VAT-inclusive purchase price in the UK and then going missing or defaulting without paying the VAT due to HMRC. This conspiracy involved the import of mobile phone accessories and electronic media including memory and SIM cards, from the EU. Once imported, the goods would be sold on a number of times along a contrived supply chain and then they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods.
The HMRC operation involved investigations in China, Taiwan, India, Italy, Denmark, Germany and Belgium. HMRC investigators worked with overseas officials to follow the trail of money that had been illegally diverted out of the UK in a bid to avoid detection.
Over £8m assets have so far been restrained and confiscation proceedings are under way, HMRC adds.
Reporting restrictions were in place throughout the trial at Southwark Crown Court. They were lifted on December 2, on sentencing.
