HM Revenue and Customs
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£6 Million Money Launderer jailed in £68 Million Fraud (Operation Shepherd)
A Staffordshire man who pleaded guilty to conspiracy to laundering £6.3 million from the proceeds of crime has been given a two year jail sentence at Birmingham Crown Court.
Craig Johnson was the seventh member of a criminal gang to be jailed in connection with a £68 million VAT fraud, following an investigation by HM Revenue & Customs (HMRC). In June 2006, six men were sentenced to a total of 51 years for defrauding HMRC by means of a complicated fraud involving the non-payment of VAT on mobile telephones. Some sentences are running concurrently meaning a combined total of 39 years in jail for the six men.
Known as 'missing trader' or carousel fraud, the scam exploits the EU VAT system in which VAT is not charged on the sale of goods between VAT registered companies in different EU member states. The subsequent sale of goods in the UK created a VAT liability due from companies that 'disappeared'. These companies are known as 'missing traders'.
Craig Johnson's role was to launder the proceeds of the 'missing trader' fraud. He received in excess of £6 million of laundered funds in the form of racehorses, business assets, high value vehicles and property. The funds had come from accounts in Hong Kong, into which the proceeds of the missing traders' transactions - usually the stolen VAT - had been transferred.
Chris Harrison, Deputy Director of Operations, Criminal
Investigation, for HMRC said:
"Tackling 'missing
trader' fraud is one of HMRC's top priorities. It is
theft of essential public revenue by organised criminal gangs, and
is a Europe-wide problem. We are committed to pursuing those
involved no matter how complex the crime and no matter where in
the world the money trails take us. We will also actively pursue
confiscation proceedings in order to strip the guilty of their
assets, illegally derived from the proceeds of these frauds. The
sentences being handed down demonstrate the gravity with which the
courts view this crime."
He added: "We would particularly like to acknowledge the
excellent support we have received from Staffordshire Police and
West Midlands Police in bringing this case successfully to
conclusion."
The fraud began with a company called
Crownlink Networks Limited, which was registered for VAT by the
company director Charles Hackney, who ran the company with his son
in law Michael West. In the course of two months in 2001, £27
million pounds worth of mobile telephones were bought and sold by
their company. Hackney and West were sentenced to five and four
years in prison respectively.
Another missing trader called Gyraland UK Limited was run by Phillip Hague of Stoke on Trent, Staffordshire. In January and February 2002, his Bristol-based company sold £7 million worth of mobile telephones. Hague was sentenced to five years in prison.
Clive Everton Saunders of Uttoxeter, Staffordshire, had previously been involved in violent crime and ran a security company which provided doormen to pubs and clubs in the North Staffordshire area. At the time of the trial Saunders was serving five years in prison for violent affray in which a man was shot outside a busy restaurant in Stoke-on-Trent.
Saunders used his security business to recruit willing 'front men' for missing traders including Hackney and West along with his right hand man, ex soldier Craig Jones, who effectively controlled the companies ensuring that the money passed through the bank accounts. For this he received high value vehicles and property abroad. After forensic evidence led to Jones being charged with being involved in the fraud, he approached the authorities and gave evidence in court against his co-accused. Taking this into account HHJ Orme sentenced Jones to five years in prison.
Enquiries abroad established a web of accounts into which proceeds of the fraud were paid. Saunders' bookkeeper David Routledge funnelled hundreds of thousands of pounds through his bank accounts to Saunders' accounts in Hong Kong, Switzerland and Spain. Saunders used this money to fund the building of a million pound mansion in Staffordshire, purchases of many high value vehicles including Ferraris and Bentleys and a helicopter that he kept on a helipad in the grounds of his property. He also owned a Spanish villa, a boat moored on the Costa Blanca and several Rolex watches.
David Routledge pleaded guilty to his involvement part way through the trial and was sentenced to seven years in prison for Cheating the Revenue and five years for money laundering to be served concurrently. Saunders was found guilty on two counts of cheating the public revenue and was sentenced to eleven and nine years imprisonment also to be served concurrently.
Assets to the value of £6 million have been seized under the Criminal Justice Act 1988 - including 4.5 million in a related investigation (Operation Emersed). Confiscation Orders are being secured to reclaim this money for the public purse. These assets comprise of a helicopter, a yacht, two properties including Meaford Hall, Stoke, performance vehicles - a Ducati, Aston Martin, Ferrari and two Bentleys, Rolex watches and diamonds.
Matthew Wagstaff, Head of the Commercial Division of Revenue
& Customs Prosecution Office (RCPO) said:
"Missing
Trader prosecutions are the most challenging area of RCPO's
casework. This case was particularly challenging to prosecute
because of the large number of trading companies and defendants -
their complex web of associations and activities were difficult to
unravel and present to the jury. RCPO are pleased to have secured
such a high number of convictions in the face of these
difficulties and will build on these successes in future prosecutions."
Ends.
Notes for editors
1. Strict reporting restrictions have been
in place in relation to Johnson's role and subsequent
sentencing due to parallel criminal investigations. These
reporting restrictions have now been lifted on the conclusion and
sentencing of a separate investigation in which Johnston received
a 10.5 year prison sentence.
2. Details of the defendant sentenced on 27 October 2006 include:
* Craig Johnson (DOB 23.05.73) of Meaford Hall, Stone, Staffordshire, was sentenced to two years in prison. At the time of his sentencing he was already serving a 10.5 prison sentence for his role in a separate £20 million VAT fraud.
3. Defendants sentenced on 29 June 2006 in relation to this case include:
* David George Routledge (DOB 11.04.1944) of Thyme Grove, Meir Park, Stoke-on-Trent, was sentenced to 7 years and a further 5 years concurrently, in prison and disqualified from being a company director for 10 years. Routledge had a previous conviction of 9 months imprisonment in 1987 for theft.
* Craig Michael Jones (DOB 17.11.1970) of Convent Court, Stoke-on-Trent, was sentenced to 5 years in prison and disqualified from being a company director for 10 years. He had a conviction of 5 years imprisonment in 2003 for VAT fraud.
4. Defendants sentenced on 16 June 2006 in relation to this case include:
* Phillip George Hague (DOB 27.12.1971) of Chetwynd Street, Stoke-on-Trent was sentenced to 5 years in prison.
* Michael Owen West (DOB 12.09.1973) of Y Gillan, Llysfaen, Colwyn Bay, Clwyd was sentenced to 4 years in prison.
* Charles Maurice Robert James Hackney (DOB 16.05.1954) of Seaview Road, Colwyn Bay, Gwynedd was sentenced to 5 years in prison.
* Clive Everton Saunders (DOB 16.03.1962) of Fort Woodfield, Wood Lane, Uttoxeter, was sentenced to 11 years and a further 9 years concurrently in prison. Previous convictions include a sentence of 5 years imprisonment in 2003 for violent affray.
5. The Revenue & Customs Prosecutions Office (RCPO) was created by Royal Assent on 7 April 2005. An independent prosecuting authority, RCPO reports directly to the Attorney General, and is responsible for prosecuting some of the largest drug and fraud cases in the UK.
Issued by HM Revenue & Customs Media Relations Team
Website http://www.hmrc.gov.uk
