WIREDGOV

A criminal gang who carried out a £38m VAT fraud through a complex chain of fraudulent trades has been jailed for 35 years at Southwark Crown Court following a three year investigation by HM Revenue & Customs (HMRC).

The gang set up a chain of bogus companies in order to trade fraudulently in EU emissions allowances – known as carbon credits. In the first case of its kind, the gang stole around £38m through a complex missing trader fraud in a six-month period starting in January 2009. They were arrested by HMRC officers in a series of dawn raids in August the same year. The law has been changed to prevent carbon credit VAT fraud as a direct result of this investigation.

After the bogus companies imported the carbon credits free of VAT into the UK, they sold the credits on, charging VAT which was never paid to HMRC, and then dissolved the importing companies. The credits were then sold on again between three further “buffer” companies – also run by the gang – before finally being sold on to legitimate companies so the trading chain appeared legal. The VAT charged by the “missing trader” was then shared out 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. The message is clear – if you attempt to defraud the Exchequer, we will track you down and bring you to court.”

The trades were made in a matter of minutes via a computer system, and the stolen VAT was transferred to offshore bank accounts in the United Arab Emirates to ‘clean’ the stolen cash which the gang spent on luxury cars and an expensive London home.

Confiscation proceedings are underway to ensure that the criminals do not profit from their crimes.

Notes for editors

Details of defendants:

Sandeep Singh Dosanjh, DOB 15/6/82, of 164 Singlewell Road, Gravesend, Kent, DA11 7PX and 201Gloucester Terrace, London, W2 6HX. Convicted of Cheating the Public Revenue contrary to Common Law. Jailed for 15 years on 18/6/12.[redacted]. Convicted of Cheating the Public Revenue contrary to Common Law. Jailed for 11 years on 18/6/12.Ranjot Singh Chahal, DOB 29/11/1976, of 16 Dorell Close Southall Middlesex UB1 2SF. Convicted of Cheating the Public Revenue contrary to Common Law. Jailed for 9 years on 18/6/12.

Details of companies owned by defendants:

Carbon credits were temporarily zero-rated for VAT purposes in July 2009 and a permanent reverse charge mechanism was introduced in November 2010. More information here: http://www.hmrc.gov.uk/briefs/vat/brief3510.htm

Issued by HM Revenue & Customs Press Office Press enquiries only please contact:

Contacts:

HM Revenue & Customs
news.reply@hmrc.gsi.gov.uk

Andrew Bennett
Phone: 020 7147 0051
andrew.bennett3@hmrc.gsi.gov.uk

Sara Pont
Phone: 020 7147 0394
sara.pont@hmrc.gsi.gov.uk

HMRC Out of Hours
Phone: 07860 359544
news.reply@hmrc.gsi.gov.uk