Four people have been arrested after HM Revenue and Customs (HMRC) shut down a £30 million fraud operation involving the sale of mobile phones and computer processors.
The “missing trader” VAT fraud involved importing phones and computer hardware from Europe and the US, selling the products in the UK along a contrived supply chain and exporting the goods to Switzerland or Dubai through a company called Amber Communications Management Ltd (ACM).
Traders at the start of the chain, which were in some cases set up purely to facilitate the fraud, failed to pay the VAT they had charged on the original supply, HMRC said.
HMRC investigators shut down the operation after attempts by ACM to claim VAT repayments worth over £18 million. The gang had already successfully claimed £10m in fraudulent VAT repayments.
Due to the HMRC intervention, which stopped more claims being made, ACM was forced to obtain an £8 million loan to keep the company operating. This loan was supposedly from a Hong Kong-based finance company, but HMRC revealed that the backer was itself involved in the fraudulent trading.
“This gang stole vast amounts of money they neither earned nor deserved, all at the expense of honest people,” said John Cooper, assistant director, criminal investigation, HMRC.
“They did this to fund the purchase of shares, high-end vehicles, a boat and property in Dubai. We also found evidence that the gang had had numerous foreign holidays, withdrawn large sums of cash and made payments to family members
He added: “HMRC works tirelessly not only to identify and stop fraud, but also to recover the profits of crime. Our next priority is to seek out the gang’s assets, so that we can reclaim the proceeds of their illegal activities.”
The four ACM directors and traders - Garry Salter of London and Ross Bell, Brian Murray and Lonnie Smith, all from Kent - were found guilty of cheating the public revenue. Bell, Murray and Smith were also found guilty of one money laundering offence.