back to article Five jailed for £140m VAT scam

Five men have been jailed for their roles in a huge missing-trader fraud which netted £140m. The men were sentenced to 37 and a half years in prison in total. HMRC said the five were motivated by pure greed. They were convicted of various counts of cheating the Revenue contrary to Common Law. Andrew Hart (40) of Cricklewood …

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  1. jonathanb Silver badge
    Flame

    One thing that really really annoys me

    Why do these articles add up all the prison sentences to come up with a completely meaningless figure. Nobody is going to prison for 37.5 years. They have been sentenced to between 7 and 9 years, so will be out of jail in between 3.5 and 4.5 years time.

    As their money is safely offshore, they will earn about £7m each for each of the years they spend in prison, which I guess will soften the pain just a little.

    1. Anonymous Coward
      Anonymous Coward

      prison

      If HMRC get forfeiture of assets, then they get nada... oh plus they get raped.... and that ain't worth a million pounds...

      1. Anonymous Coward
        Unhappy

        I don't think so

        If your £7mill is offshore and protected the you definitely have the resources to prevent unwelcome sexual congress.

        I doubt very much if HMRC will get much of the money back. It was an easy scam but unless they were complete numbnuts they will have engaged 'accountants' to protect their ill-gotten wealth.

        Will anybody at HMRC fraud unit be called out for failing failing to spot and interfere with this earlier. I doubt it. So, not only has the taxpayer been stolen from big style and the theft (probably) remains unrecoverable we now have to house the thieves for a considerable period at taxpayer expense in the order of £50k/year/person circa £1.7 million.

        1. Anonymous Coward
          FAIL

          I don't think so either...

          > Will anybody at HMRC fraud unit be called out for failing failing to spot and interfere with this earlier. I doubt it

          £7m in missing VAT equates to £35m in turnover. With a bit of prior planning they could easily turn that over with just a few days of 'trading'.

          Clearly someone at HMRC should be disciplined for not immediately spotting a few days worth of dodgy trading from one of the more than 2m registered traders. Or maybe not.

      2. Anonymous Coward
        Thumb Down

        Yeah right..

        > If HMRC get forfeiture of assets, then they get nada... oh plus they get raped.... and that ain't worth a million pounds...

        HMRC has to find their assets in order to confiscate them. This isn't an easy task.

        Their crimes are non violent which means they will spend a month or so in a category A prison while they are assessed and then they will end up in a category C or D prison with other non-violent offenders. The chance of rape is minimal, you have been watching to many American TV shows.

  2. Ian Ferguson
    Coat

    "Five jailed for £140m VAT scam"

    Enid Blyton's stories went a bit darker when she started writing for the adult market :(

  3. Richard Jukes

    heh

    This is just the surface, so so much missing trader VAT frauds went on in the 90's and the early naughties it must be nigh on impossible for HMRC to sort it all out.

  4. kneel_in_kanada

    Shakedown Productions UK Ltd

    He should get an extra year for this company name alone.

    1. Marvin the Martian
      Thumb Up

      "Motivated by pure greed" could be their slogan

      I don't know what other motive the judge would be looking for? "Desire for income redistribution", "a pet hobby in tax legistlation"?

    2. Anonymous Coward
      Anonymous Coward

      no, but the individual who approved it should.

      Admit it, that's about the coolest company name ever.

  5. Anonymous Coward
    Anonymous Coward

    What I don't get at all

    is they screwed the government out of £140m...which is only 20% of their turnover (at the most but given the time scales it was probably lower at 15% or 17.5%). That means together they took in at least £700m from 5 shops (im guessing as there were 5 people)...Why the hell were they cheating and not just doing it legally, yet still making a huge wedge of cash as they could clearly sell several olympic sized pools (without the timing boards) of stock without much bother.

    Considering Maplin turnover less than half of that with more than 300 shops and make a good sized profit each year (over £30mil) these guys confuzzle me.

    1. Tom Wood

      Presumably

      because the only way they could be competitive was by passing some of the VAT "savings" on to their customers. A bit like the Jersey merchants that legally avoid VAT. Had they paid the same VAT as everyone else they'd not have been able to compete (or at least been as successful) in the market.

      Price too low is one of the typical clues that a deal is somewhat dodgy... "if it's too good to be true" etc

    2. nsld

      it works like this

      You register for VAT

      You import goods from within the EU so pay no VAT

      You sell the goods on plus VAT to UK businesses

      You close up the business very quickly before the VAT man is due to be paid and you get out of dodge.

      What the article misses out on is the companies that bought the goods but now cant reclaim the VAT

  6. John Dougald McCallum

    The Green Eyed Monster

    That is GREED.For some people 100% profit is just not enough

  7. Steven Jones

    Not a bad rate of return

    So that's a 37 years total, or about 25 with remission. I make that about £5.6m per year - not a bad pay rate for a few years with government financed accommodation. Even a City banker might think it not a bad return.

    Of course it may be that HMRC will be able to recover this, but I rather suspect the assets will be beyond their reach. Quite simply the key ought to be thrown away unless this nice little bunch return the money. Unfortunately it may be that our sentencing rules don't allow for anything quite so obvious.

  8. Anonymous Coward
    Anonymous Coward

    Re: What I don't get at all

    There are 2 answers, depending on whether the goods existed or not.

    If they didn't exist: you sell the goods to each other & the last link in the chain exports the goods & claims the VAT back. It becomes a purely paper based business and you get HMRC to pay you the VAT at the end.

    If they do exist: You have a product that you can sell for £10 + VAT. A legitimate retailer will have to charge £12 and remit £2 VAT. You sell if for £11. You can undercut the competition as you're not going to pay the VAT and the extra £1 is pure profit.

  9. slooth
    Joke

    Greed?

    "HMRC said the five were motivated by pure greed."

    Sounds like the pot calling the kettle black. Surely this govt dept is not serious? Does HMRC not take from the workers without actually doing any work for those funds???

    I don't see the difference!

  10. Anonymous Coward
    Anonymous Coward

    POCA, POCA, POCA

    The POCA people will be on to them.

    The convicted five stand to lose any assets they have (cars, houses, computers) and perhaps serve additional years if they fail to pony up the amounts that the POCA people take them for:

    http://www.cps.gov.uk/legal/p_to_r/proceeds_of_crime_act_guidance/

  11. John Smith 19 Gold badge
    Thumb Up

    With the UK govt 1 terra pound in the hole they need *lots* more case like this.

    Note those figures.

    5 people

    £140m

    *provided* they can get asset recovery this is *exactly* the sort of people HMRC should be going after

  12. My Opinion
    FAIL

    Some of you seem to have missed this...

    "The gang members got a flat fee of up to £30,000 for their work."

    So, no, they haven't got equal portions of a very large sum - it would appear just one of them has got the thick end of the dosh all to himself.

    And I don't think "up to £30,000" is much compensation for any number of years in the slammer, no matter how low security.

    Mind you, they'll probably come out better educated in crime and detection avoidance, and thus able to avoid the same mistakes again.

  13. JaitcH
    FAIL

    Good conviction! Lousy sentence

    The Learned Beak should have tied their sentences to the recovery of the money - say a year off for every £500,000 surrendered and, if the VAT people work hard, and the money is recovered without their help they get zero credit for it.

    A long probation, with tracker, should have been added as well. Real downer to have a civil servant probation officer running your life!

  14. Anonymous Coward
    Anonymous Coward

    Sounds like a pretty good...

    ....return to me. The idea that the law will manage to seize ALL of the money/assets under POCA or otherwise is laughable.

    Well worth the time. A sh*t and and a shave as they say.

    Let's be honest, they have robbed far less from the system (us) than many elected politicians and their cronies.

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