A criminal gang
who set up a factory potentially capable of making up to 625
million counterfeit cigarettes and five million pouches of fake
hand rolling tobacco a year were jailed today.
The plot, worth over £131 million per annum in lost revenue, was
foiled when HM Revenue & Customs criminal investigators
swooped and closed down the fully equipped cigarette factory in
Chesterfield, Derbyshire, before it went into production. During
the raid in September 2009 they discovered that the gang were also
planning to expand into making counterfeit alcohol.
In two co-ordinated searches at the gang’s other industrial units
in Blidworth, Nottinghamshire, and a barn at Top Farm, Laxton,
Newark, Nottinghamshire, the investigators also seized:
Cigarette manufacturing equipment destined for another criminal
gang, capable of producing a potential 750 million cigarettes a
year with an annual revenue loss of over £141 million, from
Blidworth, andA five tonne tobacco cutting machine to process the
tobacco to make counterfeit hand rolling tobacco and cigarettes,
from Laxton.
Gary Lampon, Assistant Director of Criminal Investigation for
HMRC, said:
“This was organised crime on an industrial scale. The gang
planned to launch a UK production facility, manufacturing
counterfeit tobacco goods by the million. We had previously seized
1.25 million illegal cigarettes from them, so in the belief that
they could make a bigger profit, they decided to make their own.
This was all about lining their own pockets and they had no regard
to the potential harm such criminal activity causes to
individuals, communities and legitimate businesses.”
His Honour Judge Johnathon Teare said “the potential loss of
revenue was substantial; the project was grand with a series of
plans set to evade duty and make millions”. On sentencing
Robinson, he said, “your expectations were high and if you had
succeeded you would be a millionaire by now and the public purse
very much depleted”.
Background
Gang members traded in smuggled and counterfeit cigarettes
illegally manufactured in the UK. HMRC had already seized 1.25
million cigarettes from the gang in two separate operations. The
first in June 2009, when one million cigarettes were seized in
Rainworth, Nottingham, and the second in August 2009 when 250,000
cigarettes were seized at the Sherwood Business Park, Nottingham.
The gang had conspired to escalate from trading in these illegal
cigarettes and tobacco, to manufacturing their own counterfeit
cigarettes and tobacco on an industrial scale. Unbeknown to the
gang, HMRC were aware of their elaborate plans and were secretly
tracking their every move, swooping once they were confident they
had enough evidence to bring the defendants to justice, but before
the manufacturing plants went into production.
At the Chesterfield plant officers also seized packaging for 43
million cigarettes, cigarette paper and cigarette tipping paper,
foil cellophane, glue and cardboard inners for packets of 20 cigarettes.
In Blidworth, 5,000 litres of 96 per cent proof alcohol was
seized in a lorry just yards before it was delivered to the gang’s
warehouse. This was enough to produce 25,000 bottles of spirits
such as vodka or whisky, with a revenue loss of £109,000.
Forensic analysis showed the liquid was denatured alcohol unfit
for human consumption.
At the barn in Laxton officers also seized 100,000 counterfeit
Golden Virginia pouches.
Notes to Editors
1. Pictures of the defendants, moving footage and still
photographs of the counterfeit tobacco manufacturing plant are
available on request.
2. Details of the defendants sentenced today, 31 January 2012 at
Nottingham Crown Court include
Phillip William Robinson, (DOB 25.02.65), of 3 Southfields
Close, Kirkby in Ashfield, Nottinghamshire, was sentenced to seven
years and four months in prison. A five year crime prevention
order was also granted. Robinson was the principal player in the
fraud heading up the tobacco manufacturing plant and running the
UK arm of the operation. He was also responsible for organising
the illicit alcohol plot. Derek Lloyd Hickling, (DOB 29.12.64), of
278 Woodborough Road, Nottingham, was sentenced to twelve months
in prison suspended for twelve months. He is also required to
carry out 120 hours of unpaid work.Hickling played a role in the
alcohol supply chain.Michael Roy Larcombe, (DOB 23.04.54), of 66
Meadowside Crescent, Nottingham, was sentenced to twelve months in
prison suspended for twelve months. He is also required to carry
out 120 hours of unpaid work.Larcombe was the driver responsible
for transporting the 5,000 litres of illegal alcohol
seized.Vincent Waller, (DOB 01.12.64), of 10 Jubilee Crescent,
Clowne, Chesterfield, Derbyshire, was sentenced to two years and
six months in prison. A four year crime prevention order was also
granted.Waller was Robinson’s right hand man and oversaw the
setting up of the machinery and sourced the commercial
premises.Peter Bent, (DOB 09.10.67), of 73 George Street, South
Normanton, Alfreton, Derbyshire, was sentenced to ten months in
prison suspended for one year. A curfew from 9pm – 6am for four
months was imposed.Bent acted as a broker in the cigarette
smuggling operation and was to partner Robinson in the illicit
alcohol plot.Phillip William Hall, (DOB 22.01.61), currently of HM
Prison Service and formerly of 5 Highland Way, Rugeley,
Staffordshire, and 26 Oberon Grove, Wednesbury, West Midlands, was
sentenced to 18 months in prison. Hall (along with co-defendant
James) was to be the supplier of the tobacco and instruct how to
operate the tobacco manufacturing machinery.Hall was jailed for
five years in March 2011 for his role in operating an illegal
tobacco manufacturing plant in Blithbury, Staffordshire.Donald
James, (DOB 14.03.49), of 51 Meschines Street, Coventry, West
Midlands, was sentenced to 12 months in prison suspended for one
year. A curfew from 9pm – 6am for four months was imposed. A three
year crime prevention order was also granted.James (along with
co-defendant Hall) was to be the supplier of the tobacco and
instruct how to operate the tobacco manufacturing
machinery.Christopher John Burns, (13.07.77), of 3 Leigh Ave,
Burntwood, Staffordshire, was sentenced to 16 months in prison. A
three year crime prevention order was also granted. Burns arranged
the transportation of smuggled tobacco and would have played a
role in commercially selling the counterfeit goods across the
UK.Andrius Kochanauskas, (DOB 01.02.82), of Ozuku, 37-1, Vilnius,
Lithuania, was sentenced to five months in prison. Kochanauskas
was taking control of the second tobacco manufacturing machinery
for a separate organised crime gang.Dangis Sulzinskas, (DOB
23.01.71), Flat 4, Nelson House, Western Avenue, London, was
sentenced to 12 months in prison suspended for 1 year. He is also
required to carry out 180 hours of unpaid work. Sulzinskas was a
driver and a supplier of smuggled cigarettes.
3. The defendants were charged with either tobacco or alcohol
smuggling offences under the Customs and Excise and Management Act
1979 or conspiracy to produce cigarettes and / or hand rolling
tobacco within the UK contrary to the Criminal Law Act 1977 and
Customs and Excise Management Act 1979.
4. Follow HMRC on Twitter @HMRCgovuk
NAT 08/12
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