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Alcohol smuggling gang jailed for £50m fraud

News Release issued by the COI News Distribution Service on 10 February 2012

A criminal gang has been jailed for one of the biggest ever alcohol smuggling frauds ever uncovered in the UK. The scam was worth £50m a year in unpaid duty and VAT and allowed the gang members to spend recklessly on high performance cars and luxury properties throughout Europe.

Gang ringleader Kevin Burrage, 49, owned Promptstock Ltd, a bonded warehouse in Essex. His brother-in-law, Gary Clark, 55, managed the warehouse which the pair used to import and export alcohol without paying a penny in tax.

The gang bought household branded beer, wine and spirits from bonded warehouses in France and imported it duty free into the UK, destined for Promptstock. Once safely through customs, the alcohol was illegally diverted to locations around the UK where it was sold on without duty being added.

The gang also reversed the fraud by appearing to send trucks to France loaded with non duty paid alcohol. The alcohol actually remained in the UK and was sold on, again with no tax added. To avoid detection, the gang sent empty trucks to the continent, several of which were intercepted by UKBA officers.

Accomplice Michael Turner owned Keytrades (Europe) Ltd which provided a seemingly legitimate cover for movements of the alcohol consignments. Davinder Singh Dhaliwal operated as Burrage’s right hand man, organising the delivery of large quantities of alcohol ready for distribution. Following a covert surveillance operation, the gang was arrested in a series of dawn raids by HMRC officers in November 2008.

Martin Brown, Assistant Director of Criminal investigation, HM Revenue & Customs said:
“This gang was interested in nothing further than lining their own pockets at the expense of honest taxpayers. HMRC will not stand by and let criminals rip off the law abiding public. We are committed to protecting public finances from attacks by organised crime, and the extra £917 million invested in HMRC will help us step up this fight. Crooks like this should beware: HMRC will find you, and you will have your day in court.”

Confiscation proceedings are underway.

Notes to Editors

1. Kevin Ramon Burrage DOB 17/07/1962 of 9 Ravendale Way, Shoeburyness, Southend on Sea, Essex SS3 8YA; was found guilty of conspiracy to cheat the Public Revenue and sentenced to 10 years imprisonment as well as being disqualified from being a director for 12 years.

2. Gary Dennis Clarke DOB 16/10/1956 of 274 Maplin Way North, Thorpe Bay, Southend on Sea, Essex SS1 3NT was found guilty of conspiracy to cheat the Public Revenue and sentenced to six years, nine months

3. Michael Brian Turner DOB 29/07/1959 of Flat 9 Merchants Place, Rendezvous Street, Folkestone, Kent CT20 1ET pleaded guilty at an earlier hearing to cheating the Public Revenue and fraudulent evasion of excise duty and was sentenced to three years, two months

4. Davinder Singh Dhaliwal DOB 26/11/1979 of 11 Langdale Gardens, Dartford, Kent DA1 2QB pleaded guilty at an earlier hearing to cheating the Public Revenue and fraudulent evasion of excise duty and was sentenced to 16 months.

5. The movement of duty suspended alcohol is controlled by HMRC and foreign Customs Authorities. Alcohol can be stored and moved between bonded warehouses within the EU without the payment of excise duties. Once the business needs to release the alcohol to retail outlets the excise duty becomes payable at the rates applicable in the host country. Therefore UK duty was due as soon as the alcohol was diverted from the UK bonded warehouse to the UK market.

6. Examples of the types of scams that the gang operated:

- Inbound diversion: A vehicle loaded with vodka arrived in the UK for delivery to the Promptstock bonded warehouse; it was diverted to an industrial unit in Hayes, Middlesex, for distribution in the UK, without the duty being paid. Dhaliwal was observed supervising the offloading of the vodka into the unit. The goods were seized by HMRC officers.

- Outbound diversion: An empty trailer was sent to France; the beer (instead of arriving in a foreign bonded warehouse) was found by HMRC officers at premises in Leicester complete with orange rotation stickers stuck on at Promptstock’s premises. A total of 30,472.7 litres of alcohol was seized with a UK excise duty value of £21,626.89.

7. One of the haulage companies involved in the fraud, Stag Freight, was owned by John Byrne, and run by Terry Ward the transport manager. They were convicted of cheating the Public Revenue and jailed for 7 years each on 26 August 2011.

8. Follow HMRC on Twitter @HMRCgovuk.

Website www.hmrc.gov.uk

Contacts:

HM Revenue & Customs Press Office
HMRC-Press-office.NDSmanagement@hmrc.gsi.gov.uk