TWO JAILED FOR £38 MILLION VAT FRAUD

10 Feb 2003 05:45 PM

Two men have been sentenced to a total of 16 years and three months imprisonment at Birmingham Crown Court for a £38 million series of VAT frauds involving the importation and onward sale of mobile telephones. The fraud involved a network of companies based in Spain, the Irish Republic and Staffordshire.

Raymond Woolley, aged 49, a company director, until recently living in Stoke on Trent, now resident in Marbella, Spain was found guilty on 20 December 2002 of conspiracy to cheat the public revenue. He was sentenced to nine years imprisonment. He subsequently pleaded guilty to two charges of money laundering. Robert Garner, aged 33, a computer consultant, of Stone, Staffs, had pleaded guilty to the same charge in September 2002 and was sentenced to seven years three months imprisonment on 24 January 2003.

Amongst the companies involved in the fraud, one, Roofsmart Limited, built up a VAT debt of £24,154,931 in just three months between 8 August and 2 November 2000. In its entire history the company only ever put in one VAT return - for a payment of £273.49.

Euan Stewart, Customs & Excise Investigation Central Regional Manager said, " These fraudsters planned to skim off huge and ever increasing amounts of VAT on their purchases whilst never paying a penny of VAT on their sales. It was a systematic attack on the VAT system by a criminal gang, determined to satisfy their greed at the public's expense. We will continue to clamp down hard on VAT fraud and these sentences should serve as a warning to those involved.

The successful conclusion of this case is a tribute to the hard work and professionalism of our investigators."

Sentencing Woolley, His Honour Judge Alistair McCreath said that it had been "a persistent fraud, carefully planned and skilfully and elaborately executed." He told Woolley that "sentences must go out as a warning to others planning to follow in your footsteps."

Notes for editors

1. Until today, reporting restrictions were in force on this case.

2. Defendants details are:
Name Raymond Woolley
Address 274 Ash Bank Road
Werrington
Stoke on Trent
Staffordshire
DOB 08.08.1953

Name Robert William Garner
Address 6 Ford Drive
Yarnfield
Stone
Staffordshire
DOB 22.08.1967

3. VAT missing trader fraud is a Europe wide problem involving fraudsters obtaining a UK VAT registration in order to acquire goods VAT free from other EU member states. They then sell the goods on at VAT inclusive prices and disappear without paying over this VAT to the tax authorities.

4. Typically, in cases like this, the mobile telephones are sold to a person in another member state for less than the price paid to the original seller. Very often they are sold back to the original exporter so that they have moved in a carousel and ended up where they first started. This type of fraud fist came to light when European suppliers of mobile phones found that they were buying back phones that they had previously sold for less than they had sold them for.

5. The object of the series of operations within the 'carousel' is not to engage in business but to generate a series of large VAT claims whilst returning the phones to the market outside the UK. The object and effect of carousel frauds is to undermine and distort the proper operation of the VAT system.

6. This type of fraud is a serious problem, and cost the UK Exchequer between £1.7 £2.75bn in stolen VAT in 2001-02. It is Customs' top VAT fraud priority and since September 2000 there has been a nationally co-ordinated strategy to tackle it. The aim is to minimise the VAT loss by preventing the frauds occurring or intervening at an early stage, preventing them from reoccurring and to maximise the recovery of debts.

7. By the end of 2003-04 Customs aim to reduce the fraud by at least £750 million. Customs & Excise have deployed around 400 staff to tackle this type of fraud and aim to have halved fraud losses by 2003-04.

Issued by HM Customs and Excise Communications Division

Anyone with information about illegally imported drugs, tobacco or alcohol or about VAT fraud can speak to a Customs officer in complete confidence. Call Customs Confidential 24 hours a day on 0800 59 5000 www.hmce.gov.uk