HM Revenue & Customs (West Midlands)


(HMRC) Multi-million VAT fraudsters sent to prison for 19 years
(Operation Shoot)

Three men and a woman have been sentenced to a total of 19 years in
prison today, at Worcester Crown Court, for their part in a major VAT
fraud to steal a staggering £50 million from the nation.

An intense investigation by HM Revenue & Customs (HMRC) began in
2002, into what has become known as 'missing trader' fraud. This
involved the dishonest manipulation of the VAT system through the
import and export of mobile phones. The fraud investigation,
codenamed Operation Shoot, featured three people from Staffordshire
and one from London.

Chris Harrison, Deputy Director of Operations, Criminal
Investigation, for HMRC said:

"This was not some kind of victimless crime, but organised fraud on a
massive scale perpetrated by criminals all bent on making fast and
easy profits at the expense of the British taxpayer. This was theft
of revenue needed to fund our country's public services such as
hospitals and schools. 'Missing trader' fraud is not merely a paper
fraud but often features links to other forms of criminal activity
including murder, shootings, kidnap, extortion and intimidation which
bring devastation to our communities. This case has links to two
separate investigations which have resulted in major prison sentences
being awarded by the courts and is a further example of our
determination and success in bringing to justice the criminals behind
this type of fraud. The sentences should send out a clear message to
others who may contemplate such criminal activity."

Customs Officers carried out a number of raids in June 2002 at
business premises in Staffordshire and London of companies controlled
by the defendants. Business records for Worldsoft, Lawley and Calcon
purported to have carried out 588 transactions with either UK based
'missing traders' or hijacked VAT registered companies. Amounts
totalling over £50 million were charged as VAT on these transactions
but not declared or accounted to HMRC.

Computer records also showed links to defendants in two separate
successful 'missing trader' fraud investigations by HMRC which have
been subject to reporting restrictions until the conclusion of this
case. The first, codenamed Operation Shepherd, resulted in seven men
being sent to prison for a total of 39 years for stealing £68
million. Some of these jail terms are running concurrently - Total
sentences handed down in this case came to 53 years. The second,
codenamed Operation Emersed, resulted in 12 people being sent to
prison for a total of 75 years for stealing £20 million from the
public purse. Some of these jail terms are running concurrently -
Total sentences handed down in this case came to nearly 120 years.

The gang would divide the dishonest profits of the fraud and launder
them through various bank accounts based in Europe and Hong Kong.

Confiscation Orders have been secured to reclaim this money for the
public purse under the Criminal Justice Act 1988.

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".