21 jailed for £138m VAT fraud

HMRC has sentenced 21 people to a total of 133 years in prison for stealing £138 million in a complex series of mobile VAT frauds.

The missing trader, or carousel scams saw the manipulation of VAT systems through the import and export of possibly fictitious mobiles and computer chips.

“This was not a victimless crime,” said HMRC deputy director of operations for criminal investigation Chris Harrison. “But organised fraud on a massive scale perpetrated by criminals bent on fast and easy profits at the taxpayer’s expense.”

By importing phones from the EU VAT-free, or leaving a paper trail implying they had been imported, the ‘phones’ would be sold through ‘buffer’ companies before being exported back to the EU.

As an exporter, VAT credit could then be claimed back, while the companies that bought the phones would disappear without paying their VAT liability.

Craig Johnson, who masterminded the plan, had assets including a multimillion pound stately home, helicopter, a yacht and “performance vehicles” seized.

He was sentenced to twelve-and-a-half years in prison and banned from being a director of a company for 14 years.

Other prominent defendants included Steven Lipinski, Christopher Saunders and Louise Wragg who ran buffer companies Tech Trading, Pat Telecom and First for Fones. They were sentenced to six, seven-and-a-half and six-and-a-half years respectively.

Charles McWhinnie, who ran corrupt freight company CSN Logistics, which was used to make the deals look legitimate, was sentenced to five years.