Two jailed for £57m VAT fraud

Two men were last week jailed at Preston Crown Court for a £57 million VAT fraud.

Robert Hulme, 51, of Thornton-Cleveleys and Keith Giles, 56, of Blackpool used trading companies to buy and sell mobile phones in a rigged market to defraud HM Revenue & Customs (HMRC).

The pair were directors of Blackpool-based Illumination Publishing, which purchased large quantities of mobile phones from various companies in mainland Europe and sold them on in the UK charging VAT. The company went into liquidation in August 2002 having failed to declare or pay VAT due on the £1.9 million of mobile phone sales.

They were also directors of Blackpool-based West Coast Services, which bought mobile phones mainly from mobile phone importers. Of 74 suppliers to West Coast Services, 70 were either ‘hijacked companies’ or ‘missing traders’.

None of the companies involved accounted for the VAT they are said to have charged West Coast Services, and which they subsequently claimed as ‘input tax’. Suppliers in the chain who did declare the VAT bought from hijacked companies and missing traders.

HMRC Northwest head of criminal investigations Peter Hollier said: “Organised criminals are attacking the tax system, with the aim of stealing huge amounts of revenue.

“The scale of the problem across Europe is unprecedented, and HMRC has significantly strengthened its response to this serious fraud.

“Today’s sentencing, which was the result of a lengthy investigation over a number of years by HMRC, shows we are committed to tackling VAT fraud and to showing the criminals behind it that there are no safe havens. We will pursue them, and the money they steal, wherever they operate in the world.

“In response to increasingly sophisticated tactics by the fraudsters and an increase in activity associated with missing trader fraud, HMRC has strengthened its missing trader fraud strategy to tackle this crime so this specific method is no longer possible.”