VAT – Fraud convictions
HMRC have publicised the fact that 21 people were recently jailed for their part in a £37.5 million VAT fraud. The final defendants of the crime gang were sentenced last month in an investigation by HMRC which included seven trials and retrials. In total the gang members were jailed for 74 years.
The VAT or ‘missing trader’ fraud focused on the import of CPUs, mainly from Ireland, VAT free. The CPUs were then sold with VAT through a chain of sham companies which issued fraudulent invoices. Once the goods had been sold on a number of times they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods. This was a complex fraud involving multiple sham companies.
The proceeds of crime were laundered through various bank accounts and ultimately used to purchase property in the UK and abroad, including a £4.5m flat in Knightsbridge and two apartment blocks in Dubai worth some £80m as well as other assets.
The convicted gang members were also the subject of confiscation orders to recover monies and assets resulting from the fraud. Two members of the crime gang currently serving seven year jail terms, have been ordered to repay £92.3m, the biggest ever confiscation order secured by HMRC, or face an additional ten years in jail as well as still having to repay the money.