Two arrested in £80m money laundering probe
Customs allege missing trader fraud
Customs and Excise officers investigating a suspected £80m VAT money laundering scam arrested two people in Chelmsford yesterday.
The money is believed to have been channelled through the bank accounts of two Chelmsford-based companies and suspected to be the proceeds of a VAT missing trader fraud involving the sale of mobile phones and computer chips.
Over twenty officers were involved in searches of business premises and homes in Essex, Sheffield, Nottingham and Leeds. A 33-year-old man and a 32-year-old woman were arrested for money laundering offences contrary to the Criminal Justice Act 1988.
They were interviewed by Customs investigators in Braintree and then released on bail, without charge, pending further investigations.
VAT missing trader fraud costs government an estimated £2.5 billion annually. Cracking down of this abuse of the tax system has been a top priority for Customs since September 2000.
VAT Missing Trader Fraud or 'Carousel' fraud involves importing goods into the UK from the EU that are correctly zero-rated for VAT. The goods are then sold on through a series of companies in the UK, all liable to VAT at the standard rate, before being exported back to the EU.
The company importing the goods incurs a considerable VAT debt as it has to account for VAT charged on the sales. In a fraud of this type this initial 'link' in the chain 'goes missing' and never accounts for the VAT due. ®