Four people found guilty of VAT fraud were sentenced for a total of 22 years at Maidstone Crown Court late last week.

The four fraudsters engaged in missing trader fraud, where goods are sourced VAT-free from within the EC and sold on with VAT added. The trader then disappears before paying the Inland Revenue the VAT.

For two years the gang bought and sold mobile phones and diddled the Revenue out of an estimated £40m.

Stephen Pigott, a 42 year-old musician from Dubai, was described as the gang's "leading light" and was sentenced to nine years. Ex-New York judge and music lawyer Stacey Haber-Hofberg of Liphook received a six year sentence. Two others were sentenced to 42 months each. The judge said the fraud was "audacious and outrageous" but that the real mastermind had not been brought to justice.

Meanwhile, the Office of National Statistics has warned that its monthly figures on the UK's trade deficit may be skewed by VAT fraud.

The ONS said the UK trade deficit grew in July to £5.08bn from £4.17bn in June. But it is still working on a way to remove fraudulent transactions from the trade tally. Until this is achieved the agency warns it cannot have full confidence in the accuracy of its figures.®

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