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HMRC Announces Details Of GBP51 Million VAT Fraud

by Jason Gorringe, Tax-News.com, London

04 December 2007


A self-titled 'peer' last week received two prison sentences totalling ten years at Nottingham Crown Court, for his role in a massive 'missing trader' VAT fraud.

Malcolm Edwards-Sayer, who worked as a law lecturer and a lay preacher and bought the title of Lord Houghton, was jailed for his part in a major conspiracy to steal GBP51 million from the public purse in a sophisticated VAT fraud.

An intense investigation by HM Revenue & Customs (HMRC) uncovered his role as the main player in the elaborate scam, in what has become known as carousel or 'missing trader' fraud, and in plans to launder the proceeds of crime.

This involved the dishonest manipulation of the VAT system through the import and export - principally of mobile phones - over an eighteen month period.

Nick Burriss Director of Operations, Criminal Investigation, for HMRC announced following the verdict that:

"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."

He continued:

"This was theft of revenue needed to fund our country's public services. Missing trader fraud is not merely a paper fraud but often features links to other forms of serious and organised crime which brings devastation to our communities. This case is a further example of our determination and success in bringing to justice the criminals behind this type of fraud."

"The sentence will send out a clear message to others who may contemplate such criminal activity," he concluded.

The fraud involved the purported import of mobile phones and computer chips from various EU countries, VAT free. The goods would then be sold on more cheaply, but with VAT added, through a chain of companies.

Once the goods had been sold on a number of times they would be exported back to EU countries. The companies would then default or go 'missing' before making their VAT repayments to HMRC.

On sentencing, His Honour Judge Teare observed that:

"You were diligent and dedicated in carrying out this fraud. You persisted in defrauding the nation and offered these services to others to help them commit fraud. You are a 49 year old adult and when you look back at your lifetime, it's filled with crime."

He added: "I commend HMRC investigation officers for their hard work in this complex investigation."


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