VAT fraudsters sentenced to total of 133 years

HMRC secures 21 convictions over £138m scams


More than 20 people have been sentenced to a total of 133 years for their part in a series of major mobile phone carousel fraud conspiracies in the UK.

Her Majesty’s Revenue and Customs (HMRC) said on Friday that its lawyers had concluded more than seven years of work on three interconnected carousel or “missing trader” VAT fraud cases. The cases were concluded between April and August, but reporting restrictions have only just been lifted.

A total of 21 people were found guilty of stealing £138m from the taxpayer in a series of complex carousel frauds involving the import of mobile phones from various European Union countries, VAT free.

Three people from Staffordshire and one from London were sentenced on Friday to a total of 19 years in prison for their part in a £50m VAT fraud following a major investigation codenamed Operation Shoot.

One of the defendants, Stephen Hancock (DOB 05.03.1958) formerly of Grove Farm, Kingsley Road, Cellarhead, Stoke-on-Trent, Staffordshire, was also sentenced in a linked investigation, Op Emersed.

That case resulted in the sentencing of 12 people – seven from Staffordshire, three from Manchester, one from Leicestershire, and one from Essex – to 75 years in the slammer in a £20m carousel fraud. Total sentences dished out to the gang came to nearly 120 years, said HMRC.

The final case, Op Shepherd, led to the sentencing of seven men, five from Staffordshire and two from Wales guilty of their part in a £68m VAT Fraud. They were handed down prison terms of 39 years; total sentences came to 53 years. Craig Matthew Johnson (DOB 23.05.1973) of Hanchurch House, Trentham Park, Hanchurch, Stoke-on-Trent, Staffordshire, a defendant in Op Shepherd, also featured in Op Emersed.

"This was not some kind of victimless crime, but organised fraud on a massive scale perpetrated by criminals all bent on making fast and easy profits at the expense of the British taxpayer," said HMRC director of operations, criminal investigations, Chris Harrison.

"This case is a further example of our determination and success in bringing to justice the criminals behind this type of fraud. The sentence should send out a clear message to others who may contemplate such criminal activity."

Carousel fraud has been a big headache for HMRC. It introduced a "reverse charge" method in July 2007 in an attempt to crackdown on the growing problem.

According to a KPMG Forensic report earlier this year, organised gangs pushed the value of fraud to a 12-year high in 2007, with the UK government being the largest victim of their criminal activities.

It monitored fraud levels for 20 years and found the total value of cases heard by UK courts in 2007 - £1.02bn - was the highest recorded since 1995. However, Treasury estimates of the amount lost to VAT fraud alone have ranged as high as £3bn. ®

Sponsored: Minds Mastering Machines - Call for papers now open

Biting the hand that feeds IT © 1998–2018