VAT fraud - a profitable business - £400 Mn a month ..ish

Missing Trader Intra-Community (MTIC), or 'missing trader' fraud , is a highly sophisticated and organised criminal attack on the UK VAT system. It is an EU-wide scam, estimated to have cost the UK government between £1.12billion and £1.9 billion in 2004/05. The sums being lost are so huge they have been distorting the country's trade statistics and income - UK VAT revenues fell last year, the first time since its introduction 1973. The Torygraph report that the Inland Revenue's £1.155 billion slice of £6.6 billion of imports, out of a total £45.7 billion worth of EU imports, has been lost over the first quarter of 2006. The annual loss will be £4.6 Bn in 2006 if it continues unabated. The Office of National Statistics announced last month that such fraud fell by £500m to £1.2bn between July and August.

Criminals import compact , high value goods such as mobile phones and computer chips, free of VAT, from other countries in the European Union. The goods are sold on with VAT in the UK , but the criminals disappear with the tax they have collected instead of handing it over to the tax collectors, HMRC. Newer variations involved extra EU nations especially Switzerland. There has been some success against one operation .....

Avantis Trading Ltd, Diamond Traders International Limited and Sovereign Imports Limited were connected companies based in Birmngham which turned over a staggering £185 million in 7 months.

They operated a complex and sophisticated scam that was unravelled by officers from HM Revenue & Customs (HMRC) and has involved 3 separate trials:

Trial 1.

In April 2006, Asad Chohan and Saajid Chohan were found guilty of evading excise duty of £750,000 under the Customs and Excise Management Act 1979 following the seizure of 2.4 tonnes of hand rolling tobacco at Dover Eastern Docks on 17 August 2000.

Asad Hussain Chohan, (38) of Wake Green Road, Birmingham, was sentenced to four years in prison in April 2006 and one year consecutive, for absconding during the trial. He is believed to be in Pakistan. He will face trial in relation to the 'missing trader' fraud and money laundering activities when (and if) re-arrested.

His younger brother , Saajid Chohan (33) of Wake Green Road Birmingham, was sentenced to 18 months in prison

Trial 2

In July 2006, Saajid Hussain Chohan (33) and Mohammed Ilyas pleaded guilty to cheating the public revenue of £5.17million in a 'missing trader' fraud. Saajid Chohan (33) was sentenced to a further four years in prison for the 'missing trader' fraud in July 2006. A Confiscation Order of £120,318 was also made and a further two years will be added to his sentence if he defaults on the Order.

Mohammed Ilyas, (46) of Bagnell Road, Birmingham, was sentenced to three years in prison .

Trial 3

Concluded on Wednesday 15 November 2006 in Birmingham Crown Court , Samiah Ali Chohan (34) and wife of Asad, was found guilty of a money laundering offence under the Criminal Justice Act 1988, through the purchase of a property, valued at around £380,000. She gave a previous address of Wake Green Road, Birmingham, and now of "Lauriston", Manchester Road, Rochdale, and was sentenced to a Community Service Order of 80 hours.Pic shows, bijou, compact 10 bedroom Victorian textile magnates mansion, "Lauriston", Manchester Road, Rochdale.

The court heard that the organised crime group was controlled by Asad Chohan and included his brother Saajid Chohan, his wife Samiah Ali Chohan and Mohammed Ilyas, the family bookkeeper and a member of the Institute of Accounting Technicians.

Chris Ballard, assistant chief investigation Officer for Revenue & Customs said:

"This was not some kind of advanced tax planning, but organised fraud on a massive scale perpetrated by criminals.

"They had the active co-operation of professionals in the legal and accountancy sectors, all bent on making fast and easy profits at the expense of the British taxpayer."

Investigations into the Chohan frauds led to a separate, investigation which identified over £200 million of 'missing trader' money being laundered through a firm of solicitors, Beveridge Gauntlet of Fleet, Hampshire.

The firm had been launched a year earlier with an overdraft teamed up with "dodgy clients" transforming its "sacrosanct" client account into a bank, it was claimed in court. 7 sham companies were able to launder £250 million between May 2002 and March 2003 through the firm's client bank account. The use of the solicitors' client account gave the fraud an air of legitimacy.
The company's Legal Executive Laurence Ford (56), twice divorced father of two children, was sentenced to 6 years in prison in June 2006 at Southwark Crown Court for money laundering offences contrary to Section 93C of the Criminal Justice Act 1988. he is said to have been paid £40,000 for his work.

The partners of the firm Matthew Gauntlett ( Law Society Council member) and Sarah Beveridge were found not guilty at the trial (the first time solicitors had been charged with such offences), and Mr Justice Rivlin said , " ...(they) were acquitted [because] the jury accepted their case that on any view they were both wholly unsuited to the responsibilities of running a practice on their own. That not merely were they inexperienced, (MG was a Law Society Council member- for Christ sakes !!) but they were quite out of their depth, neither having the strength of personality to run a firm themselves. They were woefully [unable to] fulfil the responsibility expected of partners.’

It must have cheered up the HMC when Elizabeth Robinson, of Peters & Peters, the lawyer representing Sarah Beveridge was made Lawyer of the Week by The Times on June 13, 2006. She had been working on this case for three years and the barristers involved, Andrew Radcliffe, QC, and Tom Forster, for two years. The costs for the "out of depth" lawyers defence in the 6 weeek trial would make your eyes water. - and would be paid by HMC.

Beveridge Gauntlett, was closed down by the Law Society three years ago. Their rather grand address of "Rosebank Chambers " was in fact a first floor office above an off-licence and estate agent, in an ordinary shopping parade in the village of Yateley, near Aldershot in Hampshire.

Having locked up Ford, (which took over 3 years) HM Customs officers have yet to find the ringleaders. A senior partner at accountants Grant Thornton, said: "This guy is the tip of the iceberg. Government attempts to crackdown on this type of fraud seem to be having no effect whatsoever."

On Wednesday 15 September 2006 HM Customs issued HMRC Business Brief 14/06 with dertails of what is called Reverse Charge Accounting for traders in Mobile phones, computer chips, electronic storage meda (memory cards) for MP3 players,palm computers, GSP driven Sat Nav systems and electronic game consoles which they expected to introduce on December 1st 2006. On the 10th November they announced a delay (Because EU discussions about the necessary derogation are still continuing ?) and stated they would give traders 8 weeks notice when it was introduced.

Reverse Charge accounting changes the responsibility for VAT payment to the purchaser, rather than the seller - subject of course to all sorts of conditions - small transactions etc.,

It is hoped that this change in accounting will eliminate the fraud. Don't hold your breath.

Chancellor announces 92% drop in VAT carousel fraud (MTIC) ..... Street festivals, joy is unconfined... medals and knighthoods all round

Alastair Darling introduced his 2007 Pre-Budget report today, (286 pages) coyly entitled "Meeting the aspirations of the British people" . The Office of national Statistics also produced simultaneously, "UK Trade 1st Release " from which the adjacent table is extracted from page 8 showing the MTIC fraud trade adjustment = Carousel VAT fraud as calculated by the Office National Statistics - NB this is the first time these figures have been accumulated, displayed and published in this form.

On Page 3 (instead of a picture of big tits) there is a note ...

Changes in trade associated with VAT MTIC fraud mean that comparisons of volume and prices (both including and excluding trade associated with VAT MTIC fraud) should be treated with a great deal of caution.

In the Chancellors statement / Document it is worth pondering on Page 27 ...

2.26 The deficit on the current balance in 2006-07 is £4.7 Bn. lower than expected at the Budget, as shown in Table 2.2. This is lower in 2006-07 due to continued success in tackling MTIC fraud and growth in consumer expenditure feeding through to higher-than-expected VAT payments. The deficit is also reduced by lower government expenditure than expected at the Budget, in particular spending by local authorities. The 2006-07 outturn for net borrowing is £3.9 Bn. lower than the Budget 2007 estimate.

At Page 98 we have ....

5.104 New estimates of Missing Trader Intra Community (MTIC) fraud, published today,show that the scale of attempted fraud fell by up to £1.5 Bn.in 2006-07, to between £2.25 Bn. and £3.25 Bn. The estimated impact on VAT receipts fell to between £1 Bn. and £2 Bn. These reduced estimates demonstrate the success of the Government’s strategy for tackling MTIC fraud. HMRC will take further steps to apply both criminal and civil sanctions to those who are found to be knowingly involved in fraudulent trading.

At Page 174 we can note that ....

B.47 Cash receipts of VAT in 2007-08 are expected to be £1.4 Bn. above the Budget 2007 forecast, helped by the continuing success of the government's strategy for tackling Missing Trader Intra-Community (MTIC) fraud and a stronger-than-expected rise in nominal consumer spending in the first half of 2007. Consumer spending accounts for around two thirds of the VAT base and the stronger growth reflected both higher inflation and real spending growth, above the Budget 2007 forecast range.

Finally on Page 154

A.62 As set out in Budget 2007, annual growth in recorded exports and imports and services has been distorted by activity related to missing trader intra-community (MTIC), which significantly inflated the value of measured goods trade in the first half Since the second half of 2006, Government measures to tackle MTIC fraud have led to fall in estimated MTIC-related activity, to a low level. In view of inevitable measurement difficulties involved in estimating MTIC-related activity, the ONS advises that comparisons trade volumes and prices “should be treated with a great deal of caution”. The abstracts from MTIC effects by assuming that beyond the latest quarter of data, export import volumes grow in line with underlying trade, excluding MTIC-related activity.The forecast is therefore based on the neutral assumption that the level of MTIC-related remains constant throughout the forecast at the latest quarterly estimate.

So the assault on MTIC fraud has been cut back in 2006 from the VAT on an estimated Total of £ 22.6 Bn. in 2006 to £800 Mn. in the first 8 months of 2007 ! Extraordinary. Something there to trumpet about ...if ...er ...true.... but Cave ! "Changes in trade associated with VAT MTIC fraud ...blah ...blah ... should be treated with a great deal of caution." Too fucking right pal.

Special notes to the ONS figures Page 7 are lengthy and one might just extract....

" ...Changes to the pattern of trading associated with MTIC fraud can make it difficult to analyse trade by commodity group and by country as changes in the impact of activity associated with this fraud affect both imports and exports. Originally, most carousel chains only involved EU member states. From 2004 in particular, some carousel chains have included non-EU countries, for example, Dubai and Switzerland...."

Now VAT at 17.5% on £22 Bbn. worth of goods is ...say £3.8 Bn. so that means VAT receipts should rise for the 8 months of 2007 by say ... £3 Bn.

But the Chancellor says B 47 Page 174 ...

"Cash receipts of VAT in 2007-08 are expected to be £1.4 Bn. above the Budget 2007 forecast, helped by the continuing success of the government's strategy for tackling Missing Trader Intra-Community (MTIC) fraud and a stronger-than-expected rise in nominal consumer spending in the first half of 2007. Consumer spending accounts for around two thirds of the VAT base and the stronger growth reflected both higher inflation and real spending growth, above the Budget 2007 forecast range."

So 2/3 rds of the £1.4 Bn rise is ...say .. £1 Bn. leaving a rise due to the "continuing success of the government's strategy for tackling Missing Trader Intra-Community (MTIC) fraud " of ..er.... £400 Mn.

So VAT receipts should rise this year by £3 Bn. because of the "continuing success of the government's strategy for tackling Missing Trader Intra-Community (MTIC) fraud " but the best estimate is that it will actually be only £400 Mn!!!!

.....Hmmmm. Well they did warn you.

Changes in trade associated with VAT MTIC fraud mean that comparisons of volume and prices (both including and excluding trade associated with VAT MTIC fraud) should be treated with a great deal of caution.

Apologies for the detailed and lengthy explanation, there is no way to reduce it regrettably... When the Gubment set out to confuse and obfuscate they do it in style. But you have to say that the claimed success in controlling MTIC fraud is stunning and the unwillngness to broadcast and publicise their success is really quite startling.... in fact it must count as one of the most successful criminal investigation successes of all time.

Mr Murphy at tax report calculates loss of uncollected Taxes / VAT etc., at £80 BN. (ish)

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.

VAT Carousel fraud to be tackled by new Accounting procedures

The Government have obtained permission for de-rogation for a new VAT accounting system (introduced into last years Finance Act) from the EU for handling of two categories of goods, mobile telephones and computer chips/microprocessors/central processing units which have been involved in massive Missing Trader Intra-Community (MTIC) fraud.

This so called 'reverse charge' system will help prevent fraud by reversing the standard accounting system for VAT used in the UK.

With this new system , which will apply from July 1st the supplier of the specified goods does not account for the VAT on their sales when selling to other VAT-registered businesses.

The purchaser of the goods will be responsible for payment and accounting of the VAT.
Provided that the purchaser has correctly done so, they can recover this VAT in the normal way.

This means that HM Revenue & Customs (HMRC) is not put in a position where it may have to make repayments of VAT where the corresponding tax on the sale has not been paid to it - it also places a massive burden and extra costs on legitimate traders of these items and disrupts their cash flow.

Self evidently, dishonest traders - alerted by the lengthy delay caused by the EU in introducing this system, will already have switched to other high value, low weight and volume items to perpetuate the fraud.

The HMRC claims the level of trading associated with attempted fraud has fallen significantly in recent months - it has been running for over 3 years at the level of £400 Mn. a month. They claim (rather disingenuously) "statistics published by the ONS, using estimates produced by HMRC, show that the trend of reduced levels of trading associated with MTIC fraud is continuing, with a substantial reduction in recent months."

Although their last pronouncment on producing the January 2007 Trade Statistics was alittle confusing

"Following a change in the pattern of trading associated with Missing Trader Intra-Community (MTIC) fraud, identified by Her Majesty's Revenue and Customs, interpretation of the breakdown between EU and non-EU trade is more difficult. Originally, most carousel chains only involved EU member states. More recently, some carousel chains have included non-EU countries, for example, Dubai and Switzerland. However, the import adjustment is applied only to EU imports as the goods return to the UK via the EU - but it is this part of the trading chain that is not recorded."

Which might sound to some folks that the devious crooks have already made the necessary re-arrangements... if not they will migrate again to other areas of criminality .......

........ Stephen Crisp, 49, had hidden 52.49 kilos of cocaine and 5.7 kilos of heroin (calculated at 100% purity) in 81 brown taped packages under the bunk on the passenger side of his German registered lorry which were discovered at Folkestone last August. The drugs were said to have an estimated street value of £2.7 million. He got 20 years at Canturbury Crown Court on Friday.

UPDATE Budget 22nd March 2007

Reverse Accounting has been extended to Sat Nav equipment.

Record UK Trade Deficit in 2006 - VAT / Duty Black Hole Mystery deepens

The Office for National Statistics announced today that Britain's goods trade gap grew to £7.142 Bn. December 2006 , from £6.871 Bn. in November 2006. December's figures added to the largest annual trade deficit since records began in 1697, with the total trade gap for 2006 widening to £55.8 billion pounds in 2006 from £44.6 billion in 2005. ( A rise of 25%)

Records were set last year for both exports and imports but , excluding oil and erratic items, the volume of exports rose by 1 % between November and December and the volume of imports rose by 3%. (Nota Bene No-one has said yet the economy has been "blown off course". Yet.)

Very significantly the Press release states (verbatim)

"Following a change in the pattern of trading associated with Missing Trader Intra-Community (MTIC) fraud, identified by Her Majesty’s Revenue and Customs, interpretation of the breakdown between EU and non-EU trade is more difficult. Originally, most carousel chains only involved EU member states. More recently, some carousel chains have included non-EU countries, for example, Dubai and Switzerland. However, the import adjustment is applied only to EU imports as the goods return to the UK via the EU - but it is this part of the trading chain that is not recorded." (i.e the gangsters are one step ahead)

A report was issued in March 2005 Report on impact of MTIC on UK Trade statistics
Report on further research into the impact of Missing Trader Fraud on UK Trade Statistics, Balance of Payments and National Accounts. by David Ruffles & Tricia Williams... (Download PDF 9 pages ) which baldy concluded that it was not possible to extend or refine the estimates for the impact of fraud on the statistics using the currently available sources. Page 1.

On Page 9 they add ..."There are also concerns about asymmetries in Intrastat data, in particular issues about possible fraud in other Member States, inconsistencies between Member States in the calculation of statistical value, estimation of Below Threshold Trade and late/partial response. The UK will continue to be active in the European meetings at which these issues are addressed.

While further research by HMCE into the various data sources is possible, it is very resource
intensive. In addition, because of concerns about the overall quality of those data sources, in the
judgement of the HMCE/ONS team it is unlikely to yield robust estimates for the impact on the
trade statistics of either carousel fraud in other goods or of acquisition fraud."

A report from Reuters suggested that VAT fraud cost the UK government at least £ 8.5 Bn. (yes Billion) in the year to June 2006, whic HMRC disputes burt cannot provide any precise figures - which the Chancellor was slated to produce in his December 2006 statement ...but didn't. (But.See Below in BBC report)

Intriguingly the BBC report today (although the source of the figures is not given and is certainly not in the monthly statistics) ...

"The latest trade figures also reveal a continuing slump in the amount of trade associated with VAT "carousel fraud", which has been a factor in the volatility of the figures."

In December the volume of dishonest trade dropped to just £100m. "

They continue to say, despite the caveat about dealing with non EU fraud trails noted above ...

In the whole of 2006 there was £28.7bn worth of trade associated with this fraud, far and away the worst year on record and twice as much as in 2005. Most of this was in the 1st half , .... with just £600m of it in the last quarter of 2006.

In last December's pre-budget report (unseen by anyone else) Gordon Brown revealed that the Treasury lost between £2bn and £3bn in 2005-06 because of this activity. (For statisticians that is a variance of 100% = in this case £100,000,000 - which is a fair margin for error)

Meanwhile 5 arrests were made today in Surrey by HMRC, of a gang believed to have smuggled more than 85 tonnes of hand rolling tobacco (say 5 container loads) into the UK since July 2006 which involves the evasion of tobacco duty in the region of £12.5million.

John David WRIGHT, DOB 04/08/66 of Ruxbury End, St Ann's Hill Road, Chertsey, Surrey, KT16 9NL remanded in Custody.

Andrew Jeffrey GREEN, DOB 12/01/62 of 22 Camellia Court, West End, Woking, Surrey, GU24 9XQ Bailed
Christopher William SHEARD, DOB 26/11/48 of 6 Monks Way, Staines, Middlesex, TW18 1QU Bailed.

Bali Shag is the only true European hand-rolling tobacco sold in the United States... do John Prescott and Jack Straw share the odd packet, Lord Patel wonders.

Alastair in Wonderland's Budget - the dog that didn't bark

Regular readers will be aware we have followed the massive losses to the HMRC of VAT due to Missing Trader Fraud (MTIC).

This was running at an "estimated" £400 Mn a month (that's £4 Billion a year) for several years.

This is the last mention by Alastair of this black hole in his 2007 Pre-Budget report October 2007

At Page 98 we have ....

5.104 New estimates of Missing Trader Intra Community (MTIC) fraud, published today,show that the scale of attempted fraud fell by up to £1.5 Bn.in 2006-07, to between £2.25 Bn. and £3.25 Bn. The estimated impact on VAT receipts fell to between £1 Bn. and £2 Bn. These reduced estimates demonstrate the success of the Government’s strategy for tackling MTIC fraud. HMRC will take further steps to apply both criminal and civil sanctions to those who are found to be knowingly involved in fraudulent trading.

But does add .Changes in trade associated with VAT MTIC fraud mean that comparisons of volume and prices (both including and excluding trade associated with VAT MTIC fraud) should be treated with a great deal of caution.

To this you can add as detailed by Mr Murphy of Tax Research at the date of that PBR ...

- 14.2% of VAT is not collected. Current cost (my estimate based on HMRC data) - £13.24 billion

- £400 million of duty on spirits is not collected

- 13% of cigarettes are smuggled - cost £1.65 billion

- 56% of hand rolled tobacco is black market - cost £750 million

- £350 million of diesel duty is evaded in the UK

- 43% of all diesel duty is evaded in Northern Ireland (people cross the border) - cost £210 million

To which he adds .

- 13% of tax due by those subject to self assessment is lost

- 1.2% of PAYE and NI due on small and medium sized payrolls is lost

- About 14% of tax due by small and medium sized companies is lost.

The losses on that lot come to £5 billion - but their data is up to 5 years out of date - amazingly.

I’ve reflected on this data. Extrapolating the average tax lost on direct taxes and those taxes that probably behave like them and applying this to 2007/08 HMRC data then total direct tax losses might be £17.6 billion, VAT might be £13.2 billion and other indirect taxes £4.8 billion - a loss of £35.6 billion.

No wonder when it cam to calculating expected tax take darlin Alastair kept quiet.

.... remember, of the £Billions lost in MITC a mere few million have been recovered, although a few people are cooling their heels at HM pleasure.

UK Trade for 2007 - Exports down 10% - Imports up , Carousel VAT fraud stopped rising as well

Stop Press : The Official Champagne trade body CIVC report that Britain imported 39 million bottles of Champagne last year - more than Spain, Japan and the United States put together - rising by 5.9 % last year.

UK Regional Trade in Goods have been released today ;

EXPORTS

Total value of UK exports for the 12 months to Dec 2007 was £219 Bn and fell by £ 24 Bn (10%)
UK exports to the EU decreased by £25,595m (17 %) in the same period. Northern Ireland was the only country of the UK that had an increase.

UK exports to countries outside the EU increased by £693m (1%).

IMPORTS

The total value of UK imports for the 12 months to Dec 2007 was £308.6 Bn. and rose by £ 6 Bn. (2%)

UK Imports from the EU increased by £4 Bn. (2.5 %) in the same period.

UK Imports from countries outside the EU increased by £2.6 Bn (2 %).

Trade Gap/Deficit = a Record £88 Bn. it was £55.8Bn in 2006 and £44.6 Bn in 2005

NB : Comparison of Exports and Imports between 2006 and 2007 are affected by changes in trade associated with VAT carousel fraud (MTIC) and by EU enlargement in January 2007

Sandra Tudor of the Trade in Goods Branch Statistics and Analysis of Trade Unit Balance Of Payments Division Knowledge, Analysis and Intelligence in a document accompanying the Trade Statistics released today says that the impact on the trade statistics associated with Missing Trader Intra-Community VAT fraud is currently growing again – estimated at over £8 billion in Q1 2006 (13 billion euros or 14 billion US dollars).

Substantial adjustments (now up to £8 billion in a quarter) are being made to the trade figures to account for missing trade declarations associated with MTIC fraud.

She says in the same document ..."It is essential that it is made clear that the estimates are of missing trade declarations associated with carousel fraud, NOT of the fraud itself. The level of tax at risk is substantially lower. On a simplistic basis the level of tax at risk is 17.5% of the trade (the UK VAT rate). However, this will overestimate the level of VAT loss and we have explained to the Press that the estimate of the impact of MTIC fraud on trade should not be used in this way."

If adjustments are being made of £8Bn of trade transactions in 1 Quarter are being made then at a generous 10% = $800 Mn. of VAT per Qtr = £3.2 Bn. a year is still going missing in VAT payments.

Sandra Tudor explains how Carousel Fraud works ...



More posts on Carousel Fraud here and also "Lord Houghton" , law lecturer, lay preacher in £51 Mn VAT carousel fraud jailed for 61/2 years - 8 Mr Bigs free due to botched investigation by HMRC 29-11-2007 and ...Another fucking thieving VAT carousel fraudster locked up - Harjit Singh Takkar, he stole £4.5 Mn. in 3 months from taxpayer. 28-9-2007 also Raymond John Cox , Big fish caught in Carousel fraud (MITC) and £85 Million of taxpayers money which has gone AWOL 12-6-2007 also Massive Europe wide raids to tackle huge VAT fraud 12-12-2006 and how most of them used a certain bank ...VAT scams used Bermuda based Transworld Payment Solutions to move money 11-22-2006

Pic of lady called Stacy Haber-Hofberg, DOB 25/01/62 a former environmental judge in New York , who had moved to Liphook, Hampshire with her English husband and their three young children , received six years in September 2005 along with 3 others for her part (total 22 years in jail) in a £40Mn. VAT fraud. In passing sentence, Her Honour Judge Williams said, "It was an audacious and outrageous fraud... all defendants showed a shameless dishonesty."The highly organised scam, operated over 2 years, involved buying mobile phones from twelve fictitious companies (they were clones of legitimate UK firms, set up in Hong Kong with names and letter-heads identical to British firms dealing legitimately in telephones and computer chips) and using false receipts to charge VAT on the transactions, resulting in a loss to HM Revenue & Customs of more than £40 million.

2 VAT fraudsters - took £16 Mn plus - get 10 years total = 5 years actual - assets recovered - ZERO

John Robert Donnan, DOB 13/2/1956, of 30 Watersfield Way, Edgware, Middlesex HA8 6RZ pleaded guilty to 8 counts of concealing or disguising the proceeds of criminal conduct contrary to section 93C (2) of the criminal justice act 1988, (money laundering totaling £4.86 million) committed between August 2001 and December 2002 yesterday, at Southwark Crown Court. He was sentenced to swell the chock full prison population for seven years imprisonment (AKA 3.5 years with good behaviour) and disqualified from being a company director for eight years.

Gerard Joseph Hyde, DOB 09/05/1952, formerly of 10 Lindfield Road, Ealing, London W5 1QR. He pleaded guilty to 7 counts (approximately £2 million) of concealing or disguising the proceeds of criminal conduct contrary to section 93C (2) of the criminal justice act 1988 committed between February 2002 and December 2002. He was jailed by Southwark Crown Court on 24 May 2007 for three years and six months for his part in the crime.

Donnan, is/was an Australian property developer and is alleged to be the Mr Big in a massive multi million pound money laundering operation that took place over 16 months and across several countries. He was the director of, or associated with, several companies in the UK, Ghana and the Channel Isles that were used to launder the criminal proceeds.

The scam exposed by HMRC used fraudulent companies who sold mobile phones to companies in the UK these companies sold the phones on, charging VAT and then disappeared without accounting for the millions of pounds in VAT. The tax payers money handed over by the HMRC in a period of 16 months amounted to almost £31 million.

Proceeds of the fraud of almost £16.5 million on the UK taxpayer were removed from a Hong Kong bank account and then laundered through accounts in Hungary, Dubai, Ghana, Isle of Man, Guernsey and the UK.

This sounds like a big bust . Missing trader fraud (MTIC) has resulted in losses by HMRC of up to £2 Billion per Quarter for several years and probably now totals over £20 Bn.... the cost say of Northern Wreck or a fleet of 6 massive new Aircraft carriers complete with their planes.

This sounds like a big bust . It is hardly scratching the surface of this massive fraud and recovery of funds in this case is (like most cases) zero.

Madoff money is said to have been re-directed to Israel and is still available to many investors.

Mathaba have a story that Madoff has moved money to Israel where it is available to clients. They claim this results from the disclosures of secret Swiss / Lichtenstein bank Accounts that the US IRS is currently working on. They also say the total funds involved may be up to US$100 Bn.

One has to remember that there are very, very large numbers of people all round the world denied access to conventional methods of investing their earnings - they may find it difficult to explain having large capital sumas at hand which may result from :

1 VAT Missing Trader fraud in the EU - it is running at £4 Bn a year at present in the UK alone

2. Production, transport, distribution of illegal drugs (According to the 2005 United Nations World Drug Report, the value of the global illicit drug market for the year 2003 was estimated at US$13 billion at the production level, at US$94 billion at the wholesale level, and US$322–$400 billion based on retail prices and taking seizures and other losses into account. )

3. People trafficking / prostitution (United Nations Office on Drugs and Crime (UNODC) The UN and other experts estimate the total market value of illicit human trafficking at $32 billion - about $10 billion is derived from the initial "sale" of individuals, with the remainder representing the estimated profits from the activities or goods produced by the victims of this barbaric crime.

4. Illegal Arms Trade - Size ? ask Mr Bout - unfortunatel he's in prison in hailand currently so may remain quiet.

5. Theft by Russian Oligarchs from the USSR State Assets - Size - consult ask Mr Berezonvsky - he should prove co-operative he has British citizenship.

6. Every other form of crime, financial fraud, embezzlement, theft etc.,profits from privatisation of the UK railways etc etc., Diamond / Gold / tantalum etc., smuggling out of Africa. Cigarette / Tobacco smuggling.

£250 Million pounds stolen from UK Treasury

The stunning scale of theft from the Treasury by VAT fraud was underlined in July 2003, when 350 officers raided 93 premises across the UK and Spain, and made 42 arrests.

Today Customs officers made 10 arrests nationwide (In addition, European arrest warrants have been issued in France and Spain against four individuals. ) after 5 years investigating a suspected £250 million VAT missing trader fraud.

More than 500,0000 documents , 361 hard drives have been systematically examined, along with the hard drives of 391 computers

Those arrested are alleged to be the operators a sophisticated network of companies that 'carouselled' large quantities of mobile phones, buying them VAT-free from the continent to supply to businesses in the UK, and then defaulting without paying the VAT due.

Those arrested are

* Curtis Laurent (dob 30.9.58) 56 Ty Draw Rd, Roath Park, Cardiff, CF23 5HD.
* Marcus Hughes (8.9.70) HMP Dovegate, Uttoxeter, ST14 8XR.
* Keith Bennett (4.8.61) Beechwood House, 14 Brownswood Rd, Beaconsfield,
HP9 2NU.
* Hashib Apabhai (20.4.60) 1 The Gatehouse, Gatehouse Lane, Bedworth, CV12 8UE.
* Mohammed Novsarka (15.3.61) 216a Coventry Rd, Warwickshire, CV7 9BH.
* Peter Ebbrell (13.5.51) 3 Abberton Way, Coventry, CV4 7HF.
* Keith Ponder (20.11.50) Furzefield House, 3 Furzefield Road, Beaconsfield,
HP9 1PQ.
* Amir Naghibossadat (6.9.70) Flat 43 Clarendon Court, 33 Maida Vale, London
W9 1AJ.
* Sampson Goldstone (17.4.75) 2 West Lynn, Devisdale Rd, Bowdon, Cheshire.

Apabhai, Novsarka and Goldstone have been charged with money
laundering offences.

Goldstone was arrested at Heathrow Airport yesterday evening, Monday 5 February 2007 and subsequently charged. He has property and spends a lot of time in Monaco.

A 10th man and a 37 year-old woman were arrested late this afternoon

These arrests relate to frauds allegedly perpetrated up to July 2003 - best estimates are that it continues at the rate of £400MN a month, every month throughout 2006 AT LEAST. Recovery of thewse vast amounts of cash is negligible - it is used further to fund drugs, human trafficking, fraud, terrorism, gun running, diamond and tobacco smuggling.

Hashib Apabhai has cropped up trading as Kings Chambers from his luxury house on a gated estate as a lawyer but is unknown to Law Society and the Bar Council. The DTI tried to close down 2 property companies he was involved with Sterling Mansion (UK) and SMI Overseas who had employees who then went on to work for Properties of Distinction and Turningpoint who in turn were connected to CM2 (commenced trading Jan 2003) , all trading from the same address in Peterborough which fleeced "investors" in 2003.

Curtis Laurent was disqualified as a Director for 11 years from 26/05/2006 relating to his activities as a Director of Sava Ltd Co No 04204698 UNIT 12 MAESGLAS INDUSTRIAL ESTATE NEWPORT who closed with a Creditors Voluntary Liquidation of £6,273,791.00.

It appears Mr Laurent from 20/1/04 to 3/4/04 ( that's 6 fucking weeks !) , allowed Sava Ltd.,to Purchase goods worth, at least, £23,331,538, with no VAT payable, from suppliers based in Portugal and Luxembourg . Selling these goods for the sum of £27,585,342 including VAT of at least £4,108,454, to customers in the UK. Making payments of, at least, £7,543,800 to parties other than the supplier of Sava, Mr Laurent disregarded the suspicious circumstances surrounding a number of transactions involving the supply of mobile telephones and computer components, which should have alerted him to the risk that the VAT payable to HM Revenue & Customs & Excise in respect of the supplies would go unpaid. Which resulted in HM Revenue & Customs claiming the amount of £6,170,964 in respect of unpaid VAT and charges.

£6.1 Mn in 6 weeks. Cash in the Bank from HMG.

VAT fraud - launder £6 Mn get 2 years

Missing Trader Fraud has at it's peak been costing the UK taxpapyer £400Mn a month,for several years. Yesterday the HMRC (who have had up to 1,500 staff on the case at a time) finally succeeded in jailing some of the active UK based participants.

At Worcester Crown Court yesterday as a result of the HMRC Operation "Shoot"

Gerard Michael Forrest (DOB 18.08.1968) of Prince Regent Mews, London, was sentenced to 3 years in prison.

Stephen Hancock (DOB 05.03.1958) currently of HM Prison Service and formerly of Grove Farm, Kingsley Road, Cellarhead, Stoke-on-Trent, Staffordshire, Stoke-On-Trent, Staffordshire, was sentenced to 5.5 years in prison.

Barbara Moran (DOB 03.08.1956)(Hancock's girlfriend) of Laurel Cottage, Scot Hay Road, Alsangers Bank, Stoke-on-Trent, Staffordshire, was sentenced to 3.5 years in prison.

Shane Matthews (DOB 05.08.69) of Ironside Court, Burslem, Stoke-on-Trent and formerly of 6 Partridge Close, Stoke-on-Trent, Staffordshire, was sentenced to 7 years in prison.

In all they stole at least £50 Mn. from the taxpapyer by an elaborate VAT MITC fraud

The related Operation Shepherd, resulted in seven men being sent to prison for a total of 39 years for stealing £68 million.

In related Operation Emersed assets to the value of £6 million have been seized under the Criminal Justice Act 1988 - including 4.5 million in a related investigation (Operation Emersed). Confiscation Orders are being secured to reclaim this money for the public purse. These assets inlclude a helicopter, a yacht, two properties including Meaford Hall, Stoke. Performance vehicles - a Ducati, Aston Martin, Ferrari and two Bentleys, Rolex watches and diamonds.

Craig Johnson was the seventh member of the criminal gang to be jailed in connection with a £68 million VAT fraud. He pleaded guilty to conspiracy to laundering £6.3 million from the proceeds of crime has been given a two year jail sentence at Birmingham Crown Court.

It is noticeable that recovery of cash and assets is negligible in relation to the size of the theft - total losses the the UK taxpapyer since these crimes commenced is not less than £8 Bn. pounds.

The Chancellor of the Exchequer at the time was the current Prime Minister Mr Gordon Brown.