A CRIMINAL GANG that defrauded the Exchequer of £38m in a VAT scam has been jailed for a combined total of 35 years.
The gang established a chain of false businesses allowing it to trade illegally in EU carbon credits. In just six months from January 2009, it was able to steal about £38m through a complex missing trader fraud.
HM Revenue & Customs carried out a series of dawn raids on the group in August of the same year, and the law was changed to prevent carbon credit VAT fraud as a direct result of the case.
After the fraudulent companies imported the carbon credits to the UK duty-free, they were sold on, charging VAT which was never passed onto the Revenue. The importing companies were then dissolved.
The credits were then sold on again between three further “buffer” companies, which were also run by the gang. Finally, they were sold to legitimate companies in order for the chain of transactions to appear legal. The VAT charged by the “missing trader” was shared betweenthe members of the gang.
The trades were made in a matter of minutes via a computer system, and the stolen VAT was transferred to offshore bank accounts in the United Arab Emirates to clean the stolen cash, which the gang spent on luxury cars and an expensive London home. Confiscation proceedings are underway to claim back the purchases.
Chris Martin, of HMRC’s criminal investigations team, said the scheme was “a deliberate attempt to steal as much money as possible from the public purse by a criminal gang interested only in lining their own pockets”.
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