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06 Nov 2006
The government has continued its fight against VAT fraud and successfully convicted four men over a £10m carousel fraud.
The men were convicted in Canterbury Crown court on charges of false VAT claims and money laundering. All four were banned from acting as company directors for the next 10 years, while two other men were acquitted.
Debbie Hayman, assistant chief investigation officer at HM Revenue and Customs (HMRC), said in a statement: “This sends out a clear message to those involved that we are committed to tackling VAT fraud.”
The men were convicted after the court heard that, between July and October 2003, HMRC paid Virgini Ltd VAT repayments of £7m through false VAT returns. Repayments were based on purchases of mobile phones that were allegedly exported by the company to the Ukraine. The total VAT claimed by Virgini Ltd during the three months was £10m.
The fraud was initially uncovered in 2003, when just under £1m in cash was seized as it was delivered to Gerald Readon and Matthew Sharman, who were both associated with Virgini Ltd. They were subsequently jailed for eight years for conspiracy to transfer criminal property.
Durgesh Mehta, who also had connections with Virgini, was sentenced to a total of 33 years for cheating the public revenue, money laundering and conspiracy to transfer criminal property. He received five separate sentences, which will run concurrently. Peter Ratcliff was jailed for eight years.
Eddie Pacey, director of credit at distributor Bell Microproducts, told CRN that such convictions send out a powerful message about VAT fraud.
“It is still a worry that fraud occurs, but internal processes should still be implemented by businesses to look at both their suppliers and customers to ensure they don’t unwittingly become involved in such frauds,” he said.
Software vendor Access Accounting recently became one of the first software vendors to embrace proposed tax collection changes in the UK by announcing its intention to release a Reverse Charge software application (CRN, 30 October).
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