The huge operation, known as the Fulcrum Initiative, involves insolvency practitioners acting on behalf of Customs to trace the assets of alcohol merchants, who have evaded an estimated £30m in excise duty. Officials say the initiative involves pan-European fraud and ‘the implications could be huge’.
One of the insolvency practitioners at Baker Tilly acting on behalf of Customs, testified in a closed court session last week as part of one of its biggest cases.
Among the other insolvency practitioners involved in the initiative are Griffins and Kingston Smith. None of the insolvency experts could comment because the investigations remain ongoing.
The initiative began in August last year, after Customs raided 50 addresses in London and Wales and made nine arrests. No charges were filed at the time. Following the raids, bonded warehouse Trapps Cellars and freight forwarder Seabrook & Smith were fined by Customs £1.9m and £5.2m respectively, and both went into administration. John Davis, the director of Trapps, said the administration was precipitated by a Customs raid, because officials removed ‘vital business information’ for investigation.
A Customs spokesperson said: ‘The fraud involves diverting lorryloads of alcohol, supposedly bound for export to the continent, for illicit sale in the UK. By diverting the alcohol, no UK duty is paid.’
According to insolvency experts, this is the first time Customs has used the civil courts as well as criminal procedures to put illegal wine traders out of business.
A Customs spokesperson said: ‘It is a huge criminal and civil investigation involving lots of different operations, especially on the civil side.’ Customs could not comment on the initiative’s specifics because the investigation remains live and subject to subjudice issues.
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