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