Six men jailed for £85m fraud

Following a five-year investigation HMRC's biggest prosecution to date comes to an end

Written by Sara Yirrell

CRN, 15 Jun 2007

Six men who masterminded multi-million pound VAT carousel fraud involving mobile phones were jailed for a total of 47.5 years this week.

Raymond Cox from Staffordshire, Brett Issitt of Todmorden, Lancashire, Michael McNeill from Rossendale, Paul Sweeney who lived in Amsterdam, Peter Glover of Warwickshire and Colin Jones from Cheshire were all jailed at Liverpool Crown Court following a five-year investigation by HM Revenue and Customs (HMRC) officers.

The court heard the fraud centred on the mobile phone industry. Investigations by HMRC began in 2000 and involved breaking the audit trail of 98 businesses based in the UK, Germany, Belgium, Spain and the Netherlands.

According to HMRC the case has been one of the biggest ‘missing trader’ or MTIC frauds to be prosecuted. Over a 19-month trading period across the north west, midlands, Republic of Ireland and Europe, HMRC officers identified losses of over £85m in VAT linked to their activities. The fraudsters were directors and executives of seven of the companies identified during the trial.

Euan Stewart, director of operation criminal investigations at HMRC, said: “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. 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 criminal activity. This case is a further example of our determination and success in bringing to justice the criminals behind this type of fraud. The sentence sends out a clear message to others who may contemplate such criminal activity."

His Honour Judge Swift said: “This conspiracy generated considerable loss of public revenue. On the documents something like £85 million was taken from public revenue at a time when revenues were stretched and honest people continued to pay tax. It was a substantial and orchestrated exercise but it was no more than a scam in which all participated.

In sentencing the Judge added: “This was a conspiracy which overall cost the taxpayer a colossal sum of money. There was nothing genuinely commercial about any of it. It was fraud on a vast scale. I am satisfied there was a hierarchy with Cox at the top. From his involvement throughout, and that all his companies were involved. He had all the trappings of wealth. The fact that the phones returned to Cox’s companies in my opinion is no coincidence.”