Raymond John Cox , Big fish caught in Carousel fraud (MITC) and £85 Million of taxpayers money which has gone AWOL
HM Revenue & Customs (HMRC), have finally banged up 6 serious VAT fraudsters (1 acquitted) at Liverpool Crown Court today after a 5 year enquiry. £85 million was stolen from the tax payer in only 19 months (= VAT on sales of approx £600Mn) - 98 businesses based in the UK, Germany, Belgium, Spain and the Netherlands were involved and the 6 jailed men were directors and executives of seven of the companies identified during the trial.
Raymond John Cox (dob14/04/70) from Staffordshire, Cox had two companies in Germany - Signal Telecom GmbH and Crystal Telekom GmbH. He also had control of two companies in Spain - Zeption Telecom SL and Nauti-Parts SL and was the director of Cortage Investments Ltd based in Stoke-on-Trent. The trader which Cox predominately used was Powertone BV, in Holland, a company run by Issitt, McNeill and Sweeney.(Photographs of Cox's house and performance car collection available on request to HMRC)
Brett Simon Issitt (dob 13/12/74) 3 Manor Close, Todmorden, Lancashire. Sentenced to 10 years for his part and disqualified as a company director for 10 years.
Michael Henry McNeill (dob 30/04/71) Rossendale, Lancashire. He was sentenced to 7.5 years for his part and disqualified as a director for 8 years. McNeill, was responsible for the setting up of a template for carousel fraud entitled 'The Bible according to Mike @ Powertone' discovered during the HMRC investigation.
Paul Brian Sweeney (dob 28/11/70) resident at some time in Amsterdam, sentenced to 7.5 years for the fraud and disqualified as a director for 8 years.
Issitt and McNeill were sales executives in and Sweeney was the director of Powertone BV. This is the Dutch registered company based in Amsterdam but with the use of offices rented by Issitt in Manchester. Between April / September 2001 Powertone's turnover amounted to £49.5 million. Although Powertone was based in Amsterdam, its entire mobile phone trade was conducted from an office in John Dalton Street, Manchester.
Peter Kevin Glover (dob 21/04/55) 29 Furze Hill Road, Shipston on Stour, Warwickshire. Sentenced to 5 years for his part and disqualified as a director for 5 years. Glover was the director of Cellphone Europe BV, a company based in Brussels, Belgium, its entire mobile phone trade was conducted from Whitley Bay. Cellphone Europe 'bought' all their phones (with a few exceptions) from Powertone and then supplied the phones exclusively to missing traders in the UK. From October 2001/March 2002, Cellphone Europe sold into the UK over £81 million worth of mobile telephones. At the time of his arrest Glover was in the process of registering Cellphone Europe for Belgian VAT.
Colin Daniel Jones (dob 04/12/65) Wilmslow, Cheshire. He was jailed for 5 years for his part in the fraud and disqualified as a director for 5 years. Jones was responsible for the running of Datacell Ltd. registered in the Republic of Ireland an address in Gorey, County Wexford, Irelandand therefore was an EU supplier into the UK. Its entire mobile phone trade was conducted from an office above a shop in Northenden Road, Sale, Manchester. Prior to Glover's arrest, Datacell had made 13 purchases of mobile phones from Powertone to the value of £4.6 million. In the next four months in 117 Invoices the company purchased £38Mn.
Mobile telephones were purportedly imported into the UK, (and hence VAT free) by various companies set up by the fraudsters, who then sold the phones on, charging VAT that was then never paid over to HMRC - these companies then simply disappeared. The telephones were then 'sold' down the line to various 'buffer' traders before they were exported again often to be repurchased by the original companies at a trading loss. As the accomplices got more confident the transactions grew in number and value and it was clear from handwritten records found that those involved had difficulty themselves keeping a track of the transactions as the scale escalated.
In sentencing, the Judge said, "I am satisfied there was a hierarchy with Cox at the top. From his involvement throughout, and that all his companies were involved. He had all the trappings of wealth. The fact that the phones returned to Cox's companies in my opinion is no coincidence."
The case against a seventh defendant, Sarah Louise Smith, aged 34 from Wilmslow, Cheshire, was left on file following the failure of the jury to reach a verdict in her case. Smith is the partner of Jones and was involved in the running of Jones's company.
Proceedings can now start to confiscate the assets of those convicted.
According to the National Statistical Office Missing Trader Fraud (MTIC) or carousel fraud continues at the rate of £400Mn per months and in the whole of Europe probably exceeds Euros 4Bn.
The House of Lords recently published a report about the problem and said
Forward (inter alia)
"We conclude that existing measures to tackle Missing Trader Fraud do not prevent its occurrence and are unsustainable."
Conclusions. Para 80. It is generally accepted that the broad phenomenon of MTIC fraud is out of control; we expect it to continue to mutate into other sectors.
Pics are of Lord Patel's staff who have recently caught some big fish.