The comments are by Mr Justice Crane in a 37-page judgment throwing out a VAT fraud trial at a cost of at least 61 million to the taxpayer.

Defendants Arif Chandoo. Amjad Baig Sandeep Gletcha Aqeel Ali and Jamal Uddin were discharged after the judge decreed their trial alleging conspiracies to cheat the public revenue could not proceed because HM Revenue & Customs had withheld vital evidence from both the defence team and its own prosecution team.

The men were arrested following a covert investigation Operation Venison into their mobile phone trading activities. The investigation was prompted by statements from freight forwarders Hawk Precision Logistics (see box far right).

Customs officers had not revealed that their two star witnesses from Hawk could no longer be relied on as witnesses of truth because they too were implicated in missing trader fraud.

Both Turner and HM Revenue & Customs prosecuting officer Andrew Biker were singled out by the judge.

Incredibly Biker had been criticised in connection with disclosure matters in 1996 in the Scott Report into the Matrix Churchill case – criticism that he appears not to recognise as such noted the judge.

Justice Crane said of Turner:

I was profoundly unimpressed by Brian Turners answers to cross-examining counsel: we dont need to give you a defence and your client knows better than me.

He reconsidered those answers when I took him back to them but they are not consistent with a proper attitude towards disclosure.

The main criticism must be of Brian Turner. I accept that he did not see all the intelligence on Hawk and that the material later disclosed had not been collected together.

However since he was an experienced investigator had participated in many of the discussions about disclosure in relation to prosecution witnesses and was aware of important intelligence on Hawk and of strong suspicions held by many about Hawk his failure at least to obtain counsels advice was inexcusable.

Justice Crane said Turner had failed to adhere to Customs code on dealing with witnesses.

This specifies that: The case officer is responsible for finding out whether there are any matters that may cast doubt on the credibility of a witness (although this may be delegated to the disclosure officer). All non-official witnesses should be checked and any record must be revealed to the prosecuting lawyer.

Justice Crane added: It is contended that the failure to disclose material about Hawk and the Hawk witnesses was deliberate. It is further contended that the defence and the court were being deliberately misled and the court process was deliberately manipulated.

Counsel for one of the defendants Anthony Barnfather of Pannone and Partners commented:

Despite assurances offered to Mr Justice Butterfield in the London City Bond case which resulted in the arrest of two Customs officers the culture of secrecy within Customs still prevails in this case.

Yet again a major case has collapsed through the inadequacy of the disclosure system. The judge in Operation Venison found that senior customs personnel withheld relevant information from their own barristers which resulted in the court being misled.

I have genuine sympathy for the lack of resources Customs suffers. But we all face that in the criminal justice system. However I find the fact of deliberate non-disclosure abhorrent. An example in this case proves the point.

A company was said to have set up missing traders in a chain. This was vehemently denied. The prosecution had material in its hands all along that tended to show another individual was responsible. (Cont p2)

The public deserves – and demands – to have full confidence in the prosecution agencies of the state. When that confidence is undermined ultimately it prejudices the fight against tax fraud.

Two central features of this case are that HM Revenue & Customs hadnt got its disclosure act together and the system isnt being adhered to properly.

Senior personnel have withheld relevant material from their own barristers. If someone perverts the course of justice they can be subject to prosecution.

Customs was putting Hawk personnel forward as witnesses whereas there was evidence that called into question Hawks reliability said Barnfather.

But he didnt believe the defeat would prevent Customs from prosecuting cases.

It wont mean Customs will cease launching prosecutions he said. Im involved in a case where 33 people have just been charged.

The public demands tax fraud be reduced. But there is a grave danger in a democracy when to achieve that the authorities go down the slippery slope of thinking they know best and take the law into their own hands – bypassing the statutory framework and the courts said Barnfather.

Don Mavin of tax consultants Chiltern added:

Both operations Vitric and Venison collapsed because the defence teams were able to show that Customs had abused the process of the court by failing to disclose information and documents which were relevant to and assisted in the defence case.

Customs had been asked repeatedly to confirm whether or not it had doubts about the reliability and honesty of certain freight handling companies such as Hawk Precision Logistics Pauls Freight and LCA International among others.

Customs was also asked to clarify the precise nature of the relationship between these companies and itself. But these questions were either completely ignored fudged or more worryingly answered dishonestly.

It was ultimately found that Customs did not view the witnesses from [Hawk] as truthful but attempted to conceal these doubts in the hope that their evidence would be admitted thus aiding the prosecutions case.

There are at least 60 missing trader fraud cases currently on the stocks – either within the court system or about to enter it he said.

Following the handing down of the judgment in Operation Venison Customs issued a statement in response (see below) to the effect that any lessons for the future have to be learned and acted upon swiftly and recognising the importance of ensuring defence teams are provided with all relevant material added Mavin.

But I doubt whether Customs will fully grasp and comply with its requirements as an investigating body with regard to disclosure material in these trials.

Mavin said it did not seem as if investigators and lawyers within Customs had learned from their failings in the London City Bond cases in the 90s after which a number of officers and high-level individuals within Customs became the subject of an investigation by the Metropolitan Police.

My understanding is that Customs intends to carry on with the missing trader prosecutions awaiting trial he said.

But I suspect at some stage in the not-too-distant future a decision is likely to be made not to proceed in a large number of these cases as a result of this ruling.

See Our Shout page 14

The comments are by Mr Justice Crane in a 37-page judgment throwing out a VAT fraud trial at a cost of at least 61 million to the taxpayer.

Defendants Arif Chandoo. Amjad Baig Sandeep Gletcha Aqeel Ali and Jamal Uddin were discharged after the judge decreed their trial alleging conspiracies to cheat the public revenue could not proceed because HM Revenue & Customs had withheld vital evidence from both the defence team and its own prosecution team.

The men were arrested following a covert investigation Operation Venison into their mobile phone trading activities. The investigation was prompted by statements from freight forwarders Hawk Precision Logistics (see box far right).

Customs officers had not revealed that their two star witnesses from Hawk could no longer be relied on as witnesses of truth because they too were implicated in missing trader fraud.

Both Turner and HM Revenue & Customs prosecuting officer Andrew Biker were singled out by the judge.

Incredibly Biker had been criticised in connection with disclosure matters in 1996 in the Scott Report into the Matrix Churchill case – criticism that he appears not to recognise as such noted the judge.

Justice Crane said of Turner:

I was profoundly unimpressed by Brian Turners answers to cross-examining counsel: we dont need to give you a defence and your client knows better than me.

He reconsidered those answers when I took him back to them but they are not consistent with a proper attitude towards disclosure.

The main criticism must be of Brian Turner. I accept that he did not see all the intelligence on Hawk and that the material later disclosed had not been collected together.

However since he was an experienced investigator had participated in many of the discussions about disclosure in relation to prosecution witnesses and was aware of important intelligence on Hawk and of strong suspicions held by many about Hawk his failure at least to obtain counsels advice was inexcusable.

Justice Crane said Turner had failed to adhere to Customs code on dealing with witnesses.

This specifies that: The case officer is responsible for finding out whether there are any matters that may cast doubt on the credibility of a witness (although this may be delegated to the disclosure officer). All non-official witnesses should be checked and any record must be revealed to the prosecuting lawyer.

Justice Crane added: It is contended that the failure to disclose material about Hawk and the Hawk witnesses was deliberate. It is further contended that the defence and the court were being deliberately misled and the court process was deliberately manipulated.

Counsel for one of the defendants Anthony Barnfather of Pannone and Partners commented:

Despite assurances offered to Mr Justice Butterfield in the London City Bond case which resulted in the arrest of two Customs officers the culture of secrecy within Customs still prevails in this case.

Yet again a major case has collapsed through the inadequacy of the disclosure system. The judge in Operation Venison found that senior customs personnel withheld relevant information from their own barristers which resulted in the court being misled.

I have genuine sympathy for the lack of resources Customs suffers. But we all face that in the criminal justice system. However I find the fact of deliberate non-disclosure abhorrent. An example in this case proves the point.

A company was said to have set up missing traders in a chain. This was vehemently denied. The prosecution had material in its hands all along that tended to show another individual was responsible. (Cont p2)

The public deserves – and demands – to have full confidence in the prosecution agencies of the state. When that confidence is undermined ultimately it prejudices the fight against tax fraud.

Two central features of this case are that HM Revenue & Customs hadnt got its disclosure act together and the system isnt being adhered to properly.

Senior personnel have withheld relevant material from their own barristers. If someone perverts the course of justice they can be subject to prosecution.

Customs was putting Hawk personnel forward as witnesses whereas there was evidence that called into question Hawks reliability said Barnfather.

But he didnt believe the defeat would prevent Customs from prosecuting cases.

It wont mean Customs will cease launching prosecutions he said. Im involved in a case where 33 people have just been charged.

The public demands tax fraud be reduced. But there is a grave danger in a democracy when to achieve that the authorities go down the slippery slope of thinking they know best and take the law into their own hands – bypassing the statutory framework and the courts said Barnfather.

Don Mavin of tax consultants Chiltern added:

Both operations Vitric and Venison collapsed because the defence teams were able to show that Customs had abused the process of the court by failing to disclose information and documents which were relevant to and assisted in the defence case.

Customs had been asked repeatedly to confirm whether or not it had doubts about the reliability and honesty of certain freight handling companies such as Hawk Precision Logistics Pauls Freight and LCA International among others.

Customs was also asked to clarify the precise nature of the relationship between these companies and itself. But these questions were either completely ignored fudged or more worryingly answered dishonestly.

It was ultimately found that Customs did not view the witnesses from [Hawk] as truthful but attempted to conceal these doubts in the hope that their evidence would be admitted thus aiding the prosecutions case.

There are at least 60 missing trader fraud cases currently on the stocks – either within the court system or about to enter it he said.

Following the handing down of the judgment in Operation Venison Customs issued a statement in response (see below) to the effect that any lessons for the future have to be learned and acted upon swiftly and recognising the importance of ensuring defence teams are provided with all relevant material added Mavin.

But I doubt whether Customs will fully grasp and comply with its requirements as an investigating body with regard to disclosure material in these trials.

Mavin said it did not seem as if investigators and lawyers within Customs had learned from their failings in the London City Bond cases in the 90s after which a number of officers and high-level individuals within Customs became the subject of an investigation by the Metropolitan Police.

My understanding is that

Customs intends to carry on with the missing trader prosecutions awaiting trial he said.

But I suspect at some stage in the not-too-distant future a decision is likely to be made not to proceed in a large number of these cases as a result of this ruling.

See Our Shout page 14

Operation Vitric – another missing trader fraud case – was stayed because as in Operation Venison the judge could not be satisfied Customs had fulfilled its legal duty to disclose all relevant information to the defence lawyers.

The defendants could not therefore be guaranteed a fair trial.

HM Revenue & Customs has now blown 400 million of taxpayers cash in court costs of all the trials now abandoned – equivalent to 12 for every person in the UK.

Speaking exclusively to Mobile News Hooper said she was furious that her integrity as a witness of truth was questioned.

Hooper and her colleague Diana Ayton were arrested on February 2 last year and were kept in a police station for about 10 hours.

They were questioned on general operation issues and salary and dividend details and asked whether they had any knowledge of missing trader fraud. Their houses were searched but they were later told no charges would be brought against them and their involvement was over.

But two weeks ago Mr Justice Crane cited them as the main reason a carousel fraud case could not continue (Mobile News July 1). This was because Customs had not informed the court that Hooper Ayton and Hawk had been suspected of being involved in missing trader fraud.

Until this court case wed heard nothing more about it said Hooper. Im furious. Having ones integrity and honesty put in doubt is never nice. Luckily I have a very good reputation in this business and people seem to trust me. However this sort of thing could ultimately have a negative effect.

Hawk managing director Paul Harding said he was stunned when it emerged that such damaging statements were being made about Hawk in open court.

As the case progressed we heard about it but we never saw anything. We saw no transcripts or anything like that throughout the whole event he said.

It was only when the judgement was made that we began to see what was being said about Hawk in open court.

He acknowledged that Hawk was aware that fraud goes on in the mobile phone business.

Freight forwarders are involved because we are at the sharp end of the movement of the goods throughout. But we make a lot of effort to help Customs combat fraud. Customs officials come into us at least once a week with access to our records.

Weve always helped Customs and only ever questioned it when we have felt it has done something beyond its powers said Harding.

Full interview page 16

But the defendants were discharged after the judge found procedural errors in Customs handling of the case chiefly that it did not alert the defence team that two star prosecution witnesses Nicola Hooper and Diana Ayton had themselves been arrested.

The evidence in the Hawk witnesses statements did not in itself suggest that the defendants were acting fraudulently said the judge. But they were eventually given away because they could not be regarded as witnesses of truth.

He added: Both Hawk and the exporters played a part in suspect MTIC (missing trader fraud) trade outside the confines of Operaton Venison.

Hawk MD Paul Harding denies absolutely that Hawk has ever been involved in any wrongdoing.

It is true I am no longer at Vodafone he said. But I am unable to comment on the circumstances of my departure. However I am keen to get back into the industry at the earliest opportunity.

A dealer principal said he had heard that Graham had objected to an internal reshuffle and that his position in the sales organisation had became untenable.

One of Grahams dealer associates said: Its very strange. One day he was there the next he wasnt. No one at Vodafone has officially told us he has left what is going on or who his replacement is. Its a mystery. Ive asked a few people at Vodafone what has happened but no one seems prepared to talk about it.

Another dealer theorised: If you ask me it seems Iains face no longer fitted the newVodafone culture. Hes old school and is a personality rather than a corporate droid.

Graham joined Vodafone in April 1985 but left after eight years to establish One 2 Ones dealer network and formulate its trade channel strategy. He left One 2 One after four years to return to Vodafone.

A source close to Orange said: Orange is looking at either appointing van Gaver to the role or else not replacing Stuart Henry at all which would be daft.

Orange needs someone to get to grips with the indirect channel. It has lost day-to-day channel feedback. It is losing opportunities because its not aware of them. Its slipped behind O2 into third place and it will slip to number four next year.

Henry who will leave the company to take up the post of MD at events company Red Letter Days before the end of the year said that no decision had yet been made about his replacement.

Said Henry: I cant guarantee how Orange will handle the replacement or if it will sit from now on in a different part of the business. Nothing has been decided. But the independent channel will have to report into somewhere.

Van Gaver is a very capable and pragmatic individual. He is very good at his job and I would have no trouble recommending him. He is a guy I would support in the role tremendously.

Henry said that there were a number of internal candidates for the role but suggested that Orange may have trouble finding anyone willing to take it on.

Independent sales is perceived to be something of a poisoned chalice. When Orange does something that hacks off independent dealers they react much much worse than if O2 had done it. Its been the same for four years now.

He added: Nobody forced me out. I decided to leave Orange because I need a change and a fresh challenge.

Van Gaver has been at Orange UK and Orange France for more than 10 years. Within Gavers remit is responsibility for Oranges direct online sales.

Weve been dealing with Vodafone as a direct dealer for some time now but actually becoming one of its official distributors is fantastic for us said Robinson.

During the trial we introduced a lot of new dealers to Vodafone he said. This was incremental business as these dealers had not been previously offering Vodafone. As a result we have been appointed a full distributor as of Monday to go out and sell Vodafone. The deal makes us an even bigger force against rival distributors. We are very strong and have even more plans for expansion in the pipeline.

Vodafone is helping MoCo get started by letting the company exclusively sell the Nokia 6680 on an 18-month contract with 500 anytime minutes 100 texts and 50 video minutes included in the bundle for 40 a month. Half-price line rental applies for the first six months.

That is a very competitive offering and should win us and Vodafone lots of new business said Robinson.

Robinson is now recruiting for extra staff to handle the increased business the contract will bring.

Im looking for two or three account managers around the country as well as additional warehouse and telesales staff he said.

The deal has also sparked internal promotion. MoCo marketing manager Harvey Alexander has been made communications and operations director responsible for handling all communications to dealers and customers.

MoCo had traditionally been an exclusive O2 distributor from its days as a BT reseller. It added T-Mobile last year and Orange in May.

Meanwhile in a separate move Vodafone has extended its 3G Data Card offering by launching a new pre-pay version.

The Vodafone Mobile Connect Prepay 3G data card is priced at 199 and is available from retailers including PC World Maplin Comet Argos and Amazon.

It is also available through channel partners Ingram Micro and Computer 2000. Resellers interested in selling the card should contact them.

The card comes with a free 10MB of data transfer. Further top-ups can be purchased from the handset in Vodafone UK retail stores and online.

Usage will be charged at 3.07 per megabyte in the UK and 9.085 internationally.

To coincide with the launch Vodafone has introduced a new Unlimited price plan at 45 per month for existing contract 3G data card customers. New subscribers to the tariff will get the data card free. Downloads are subject to a fair use policy.

This tariff replaces the 450 and 1000 MB bundles. Existing customers will automatically be moved to the new price plan saving 1000MB customers 30 per month and providing 450MB customers greater usage at no extra cost.

Mobile News has assembled a team of the UKs foremost lawyers and consultants in revenue law and practice as key speakers at the conference.

They are ex-Customs and Excise investigator-turned solicitor Hassan Khan ex-Customs senior investigation officer Don Mavin barrister Anthony Barnfather former Customs solicitor Andrew Young and solicitor Alias Dass. Dass is known for having led the legal battle against Customs & Excise that led to joint and several liability being referred to the European Court of Justice.

As well as the key speakers there will also be panel discussions featuring traders who have been affected by the implications of the Finance Bill.

The timing of this conference could not be better said Don Mavin. A substantial number of businesses are beginning to trade in the grey market both old and new while Customs is doing its best to enforce the limited sanctions it has and generally to disrupt what it considers to be a dubious market.

This conference will enable delegates to hear the views of a range of professional advisers and I am looking forward to adding my own experiences in dealing with Customs to the topics on offer.

Mobile News editor Ian White added:

Since the Finance Bill traders have had deal with a fierce VAT regime. We felt Mobile News should help the channel and we are thrilled to have attracted such a fantastic calibre of speakers.

See the brochure attached to this issue call 0207 324 3500 or e-mail conference@mobilenewscwp.co.uk.

One Orange dealer said:

The situation is driving me crazy. Oranges commission used to be divided into low medium and high depending on the tariff. The loyalty system adds different factors into the equation which Oranges accountancy systems cant seem to manage. They say they are sorting it out but its causing me headache. Ive put on a lot of connections. On all of them I have been paid less than I should.

Mobile News columnist and dealer Jez Harris added: Oranges accountancy systems are all over the place. I upgraded a Talk 30 customer to Your Plan 120 on an 18-month contract and only got commission for a 12-month Talk 30 price plan.

A source at Orange distributor Avenir Telecom confirmed there had been a number of complaints.

There are problems – they have been going on for quite a while and it has been a source of concern to dealers. But Orange assures us that it is taking steps to sort this out.

An Orange spokesman said:

There were a few initial issues with paying loyalty commissions but things have now been rectified. Dealers will be reimbursed for any missing money. Any dealers who have any outstanding problems and have been paid incorrectly should contact their account manager.