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UK: Fraudsters jailed for 35 years for £38m VAT scam

20 June 2012   (0 Comments)
Posted by: SAIT Technical
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By Emily Gosden (The Telegraph)

The gang set up a chain of bogus companies in order to trade in EU carbon credits and stole the VAT payments, in the first case of its kind in the UK.

Sandeep Singh Dosanjh, who was jailed for 15 years, used the proceeds to "buy a £1m house in Gloucester Terrace and to trade in his Bentley to buy a Rolls-Royce,” Judge Peter Testar said in sentencing at Southwark crown court. Navdeep Singh Gill was jailed for 11 years and Ranjot Singh Chahal for nine years.

According to HMRC, the gang used the bogus companies to import the carbon credits - allowances for businesses to emit a certain level of carbon dioxide - to the UK, free of VAT.

The gang then sold the credits on, charging VAT - which they never paid to HMRC - before dissolving the importing companies, known as 'missing traders'.

The credits were sold on again to three 'buffer' companies – also run by the gang – and then eventually sold to legitimate companies, to make the trade appear legal.

The VAT charged by the 'missing trader' was transferred to offshore bank accounts in the United Arab Emirates and then shared between the gang.

Chris Martin, HMRC Criminal Investigations, said: "This 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. HMRC will not stand by and let crooks rip off honest taxpayers.”

Proceedings are underway to confiscate the proceeds of the crime.

HMRC said the fraud, carried out over a six-month period in 2009, had led to the law being changed to prevent carbon credit VAT fraud.

Europol, the European law-enforcement agency, estimated in December 2009 that about €5bn (£4bn) of tax was lost to fraud in carbon credits trading - the EU Emissions Trading System - in the preceding 18 months.

Separately, HMRC estimates show that wider 'missing trader' scams cost the UK taxpayer as much as £1.5bn in 2009-10, the most recent year for which data is available.


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