£11M MISSING FRAUD RESULTS IN RECORD VAT CONFISCATION ORDERS

10 Jul 2003 05:15 PM

A series of VAT trials worth over £11m has resulted in record VAT confiscation orders totalling £7.1 million and nine convictions at Blackfriars Crown Court.

This followed a joint Customs and National Crime Squad (NCS) surveillance investigation into the criminal activities of Raymond May and Vincent Stapleton who, with others, targeted the VAT system using Missing Trader Intra-Community (MTIC) fraud to cheat the revenue of millions of pounds.

In a highly complex operation the criminal organisation established companies in England and France to buy and sell high-value computer chips in what is called a 'carousel' fraud.

Economic Secretary to the Treasury and Customs Minister, John Healey said:

"VAT Missing Trader fraud is a concerted criminal attack on the tax system and is Customs' top VAT fraud priority. Customs has already succeeded in stabilising the previous rapid growth in losses and has in place a comprehensive strategy to tackle this crime including new legislative measures.

"Customs Law Enforcement has dismantled a sophisticated international fraud organisation. These criminals enjoyed wealthy lifestyles with big houses and luxury cars. We will make every effort to pursue not only the criminals but their profits too and hit them where it hurts the most - their pockets.

"It is in the interests of all legitimate businesses to prevent serial abusers such as those in Operation Advice from distorting competition and forcing honest traders out." Euan Stewart, Assistant Chief Investigation Officer, Customs Law Enforcement said:

"We are working closely with NCS and other law enforcement agencies in this case and in many other cases across the country to address VAT Missing Trader Fraud. We believe we are having a measurable impact on these fraudsters. These criminals need to watch out - we are on their case."

A National Crime Squad spokesman, said:

"This verdict sends a clear message to all criminals that the resources of the National Crime Squad and Customs & Excise will be brought to bear on those engaged in serious and organised crime, including those who perceive that this type of fraud is low-risk, high-return. It is an excellent example of inter-agency cooperation."

The NCS uncovered the VAT fraud in April 2000, following the establishment of a business premises in South West London by Vincent Stapleton and this led to the joint investigation with Customs.

Note to Editors:

1. After a series of three separate trials that began in April 2001, the details are as follows:

Raymond George May, of "The Robins", Woodlands Road, Chislehurst, Kent 46, pleaded guilty on 20.09.01 and was sentenced to five years. In August 2002 a confiscation order of £3,264,277 was made with three years given to pay or a further five years in default.

Vincent John Stapleton, of 6 Nightingale Mews, South Lake, Kingston, Surrey, 52, pleaded guilty on 20.09.01 and was sentenced to five years. A confiscation order of £2,365,769 was made with three years to pay or a further five years in default.

Jacques Bravard, a Frenchman living in London, NW9, 47, pleaded guilty on 20.09.01 and was sentenced to five years. A confiscation order of £1,386,383 was made with three years to pay or a further five years in default.

Herbert Fowles, 52, of 119 Canterbury Grove, West Norwood, London, pleaded guilty in July 2002 and was sentenced to two years. A confiscation order of £66,000 was made.

Darren Hope, 32, of 119 Canterbury Grove, West Norwood, London, pleaded guilty in October 2000 and was sentenced to two years.

Vincent Stapleton Jr, of 6 Nightingale News, South Lake, Kingston, Surrey, 22, pleaded guilty on 20.09.01 and was fined £10,000.

James Pullen, of 4 Malus Close, Addlestone, Surrey, 47, was found guilty on 08.12.01 and sentenced to three years. A confiscation order is yet to made in his case.

Steven Lawrence, of 170 Wardshill Road, Minster, Isle of Sheppey, 41, was found guilty on 08.12.01 and sentenced to four-and-a-half years imprisonment. A confiscation order has yet to made in his case.

Robert Brown-Jones, was sentenced to four-and-a-half years imprisonment at the High Court in Edinburgh in November 2001.

2. Operation Advice began in April 2000, and included an 18 month covert investigation involving 360 officers, leading to 30 arrests in the UK and France with 35 premises searched.

3. During three separate criminal trials, nine people have been convicted receiving prison sentences totalling 31 years.

4. VAT Missing Trader Fraud or 'Carousel' fraud involves importing goods into the UK from the EU that are correctly zero-rated for VAT. The goods are then sold on through a series of companies in the UK, all liable to VAT at the standard rate, before being exported back to the EU. In this particular fraud the goods were exported back to the original supplier. The company importing the goods incurs a considerable VAT debt as it has to account for VAT charged on the sales. It has no VAT repayment claim as the goods were zero-rated on import. In a fraud of this type this initial 'link' in the chain 'goes missing' and never accounts for the VAT due.

5. MTIC fraud is a serious crime, operated by organised criminal networks. That is why since September 2000 extra funding, resources and legislation have been introduced to target those deliberately defrauding the VAT system.

6. The 21st century criminals who target the UK- whether for fraud, large-scale revenue smuggling, drugs and other prohibited goods are usually well organised, well financed, cunning and adaptable. We are building a modern Customs Service to match these sophisticated modern criminals. That means building more flexible teams who are intelligence-led and able to be anywhere intelligence tells us there is a threat, at anytime.

Issued by HM Customs and Excise Communications Division

Anyone with information about illegally imported drugs, tobacco or alcohol or about VAT fraud can speak to a Customs officer in complete confidence. Call Customs Confidential 24 hours a day on 0800 59 5000 www.hmce.gov.uk