WIREDGOV

Two fraudsters have been sentenced at the Old Bailey for attempting to steal £220,000 through a complex fraud involving Chanel designer goods. They spent their money on a Chelsea penthouse, private schooling for their children and gambling at high-end casinos before being caught by HMRC.

Husband and wife Emmanuel and Behnaz Scotts, of Chelsea, West London, bought goods from various Chanel boutiques in Chelsea and Mayfair, pretending to be wealthy foreign customers. They then returned the items to another branch of Chanel to get a refund. They did this so often that their relationships with the boutiques' staff meant they were able to con Chanel into giving them VAT refund vouchers for these fictitious purchases.

VAT refund vouchers allow shoppers from outside the EU to buy goods and then claim back the VAT using a voucher (VAT 407) which is stamped upon leaving the EU. The shopper then sends the VAT 407 back to the original shop where the goods were purchased, and the VAT is refunded back to them.

Once the Scotts had collected enough fake VAT refund vouchers they used a fake Customs stamp to validate their fraudulent vouchers before sending them to Premier Tax Free (PTF), who handle Chanel's VAT refunds to customers. PTF refunded £177,000 VAT directly to the Scott's bank accounts, allowing them to spend the stolen money freely.

Martin Brown, Assistant Director for Criminal Investigation at HMRC, said:

"The Scotts thought this fraud was too clever to fail. They passed themselves off as high rollers and spent large sums of criminal cash in expensive boutiques and at casinos. They had no idea that HMRC officers were one step ahead and ready to arrest them. Fraudsters should take this as a warning - we will find you and you will have your day in court."

The Scotts lived in a £1.8m penthouse in Chelsea harbour, and although they passed themselves off as a wealthy couple who made a living from casino gambling, in reality they had very little money of their own and more than half of their rent was paid by housing benefit.

Confiscation proceedings are underway to recover the proceeds of the Scotts' crime.

NAT32/12


Notes for editors 1. Details of defendants: Emmanuel and Behnaz Scotts, both of 11 Carlyle Way, London SW10 0UQ, were convicted of intent to defraud HMRC and handling the proceeds of crime.
2. Emmanuel Scotts was sentenced to four and half years Behnaz Scotts was sentenced to 51 weeks suspended for two years, a supervision order for 12 months and a tagged curfew for four months. They were sentenced on 27 March 2012.
3. More details on the VAT refund scheme for shoppers from outside the EU are available online: http://www.hmrc.gov.uk/vat/sectors/consumers/overseas-visitors.htm

Issued by HM Revenue & Customs Press Office
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