HM Revenue and Customs
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10 arrested in nationwide fraud operation

10 arrested in nationwide fraud operation

HM REVENUE AND CUSTOMS News Release (NAT 42/07) issued by The Government News Network on 27 June 2007

HM Revenue & Customs (HMRC) officers investigating a suspected multi-million pound VAT fraud made 10 arrests this morning in nationwide raids.

Arrests were made across the UK, and 20 premises were searched in the co-ordinated dawn raids. Operation Varlet, followed an 18 month investigation into a complicated missing trader VAT fraud, commonly known as "carousel" fraud.

The investigation involved a large scale, complex missing trader intra community (MTIC) VAT fraud involving a sophisticated network of individuals, companies and bank accounts. Those arrested are suspected to be part of a ring of companies that fraudulently traded mobile phones, buying them VAT-free from the continent to supply to businesses in the UK, and then defaulting without paying the VAT due to HMRC.

Euan Stewart, Director of Operations, Criminal Investigation for HMRC said:

"Missing trader fraud is a sustained attack on HMRC, and tackling it is HMRC's top priority. Today's arrests follow months of painstaking investigative work by dedicated officers. The level of sophistication of these frauds means that our investigations are becoming more complex, but we are committed to working with the Revenue and Customs Prosecutions Office to bring the criminals behind the frauds to justice and to recovering the money stolen from the British Taxpayer. This crime is not victimless; it is organised and causes real harm."

Notes for editors

1. Arrests took place in the following areas:

* Stoke on Trent 2 arrests * Birmingham 1 arrest
      * Slough   1 arrest * Maidenhead 1 arrest * Uxbridge  1 arrest
      * Rickmansworth  2 arrests * Bushey   1 arrest
      * Hanworth   1 arrest 


2. Between April and December 2006, there were 11 successful prosecutions for missing trader fraud carried out by the Revenue and Customs Prosecutions Office on behalf of HMRC. This resulted in 40 convictions with 180 years imprisonment imposed.

3. Anyone with information about activity they suspect may be linked to fraud should call Customs Confidential on 0800 59 5000.

4. Missing Trader Intra-Community (MTIC), or 'missing trader' fraud as it is more commonly known, is a highly sophisticated EU-wide scam and an organised criminal attack on the UK VAT system. It sees criminals import high value goods such as mobile phones and computer chips, free of VAT, from other countries in the EU. These goods are then sold in the UK with VAT attached, but the criminals disappear with the tax they have collected instead of handing it over to HMRC. A more abusive form of the fraud - known as carousel fraud - involves the same goods being traded around contrived supply chains within and beyond the EU, re-entering the UK on a number of occasions with the VAT being stolen each time. The organised criminal networks behind these frauds are well resourced, innovative, resilient and known to be involved in wider criminality.

5. HMRC's strategy for tackling MTIC fraud is as follows:

* Aims to stop the fraud before it can begin, by identifying bogus businesses and refusing to register them for VAT purposes.

* Where fraudulent trading begins, to identify and stop it at the earliest opportunity by operating close controls on suspect businesses and those trading in affected areas.

* Where it cannot be stopped, we aim to disrupt the fraud by tackling all points in the supply chains and those orchestrating them, using the full range of criminal and civil measured available to us, and working closely with UK agencies and authorities abroad to identify and target suspect activity.


Issued by HM Revenue & Customs Press Office
Website http://www.hmrc.gov.uk

Customs Confidential Hotline
Tel: 0800 59 5000

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