HMRC Takes Down VAT Fraudsters

by Jason Gorringe, Tax-News.com, London

16 November 2006

Four men were sentenced to more than 16 years imprisonment at Kingston Crown Court this week, after being found guilty of GBP3.7 million VAT evasion and the laundering of the proceeds of the frauds.

The court heard that the enquiry carried out by HM Revenue & Customs (HMRC) investigators was essentially conducted in two phases, involving four companies.

The first phase related to Cavalier International Air Freight Ltd (Cavalier) and MGT International (Co) Ltd (MGT) who between February 2001 and June 2001 imported computer chips from the Republic of Ireland but did not account for the GBP1.3 million of VAT that was accrued from the onward sale of the goods.

The second phase covered the period October 2001 to March 2002 and related to the activities of KTS Impex Ltd who purported to buy computer chips from Trinity Business Systems Ltd and Raja C&P but made payments to suppliers in the Republic of Ireland. This trading resulted in a VAT loss of GBP2.4 million.

Delivering his verdict, His Honour Judge Campbell announced that:

"This was a sophisticated fraud which became more sophisticated as it went on. It was difficult to investigate and prosecute. This type of fraud costs the economy dearly. All defendants merit an immediate custodial sentence."

Robert Gray, Assistant Chief Investigation Officer for HM Revenue & Customs added:

"Tackling MTIC fraud is HMRC's top priority. It is theft of essential public revenue by organised criminal gangs, and is a Europe-wide problem. HMRC is committed to pursuing those involved no matter how complex the crime, and no matter where in the world the money trails take us. We will also actively pursue confiscation proceedings in order to strip the guilty of their assets, illegally derived from the proceeds of these frauds. The sentences being handed down demonstrate the gravity with which the courts view this crime."

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