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UK Sends Tough Message To Carousel Fraudsters

by Jason Gorringe,, London

23 November 2010

Convicted VAT Fraudster Emmanuel Hening, already serving a 15-year sentence, has had a further nine years added to his sentence by a court in the UK as the authorities there seek to send the strongest message possible that so-called 'carousel' fraud will no longer be tolerated.

Convicted in December 2006, Hening was also ordered to repay GBP40m under a confiscation order in favour of HM Revenue and Customs (HMRC). His failure to comply resulted in the additional sentence being imposed last week by Birmingham Magistrates Court.

The French-Belgian national, formerly a Luxembourg resident, headed an eight-strong gang who received a combined 40-year sentence for a complex GBP54m 'carousel fraud' involving the sale of mobile phones.

The phones were purportedly imported into the UK VAT-free by various companies set up by Hening. He then sold the phones on paper, charging VAT that was never paid over to HMRC. These companies then went ‘missing’. The phones were then ‘sold’ down the line to various ‘buffer’ traders one of which was operated by Raykanda before they were exported back to Hening. Each company made an agreed profit margin on the phones. The companies were based in the West Midlands, Lancashire and the Isle of Man.

European Union member states have joined forces recently to combat carousel fraud, which was thought to cost tens of billions of euros per year in lost tax revenues. This coordinated action will culminate in the creation of 'Eurofisc', a network of national tax officials that will be tasked with detecting and combating new cases of cross-border VAT fraud.

Richard Meadows, Assistant Director of Criminal Investigation for HMRC, said:

"We are determined to restore this money to the nation´s finances, in what is one of the largest confiscation orders ever gained. The additional nine year jail term given to Hening sends the strongest warning yet to criminals that they cannot hide, even in prison, from our actions to seek further justice. Working closely with the Crown Prosecution Service, we will continue our efforts to reclaim his criminal profits. This was organized fraud on a massive scale by criminals intent on making huge profits at the expense of the British taxpayer. "

Alun Milford, Head of the Crown Prosecution Service Organized Crime Division said:

"This was a very substantial order which Hening has shown no inclination to pay. The activation of the default term shows our determination to do what we can to enforce payment."

A similar confiscation order was made in February this year, when Hening´s partner in crime, Jaswant Raykanda, was ordered to repay GBP3.8m and a third defendant, Bhovinder Singh Sangha, was ordered to pay GBP4.7m in April 2007.

TAGS: court | money-laundering | tax | value added tax (VAT) | law | United Kingdom | telecoms

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