8/6/2008 11:28:00 AM
Three men guilty of £250m mobile phone trading fraud
Three men have been found guilty of VAT offences, as HM Revenue and Customs’ (HMRC) largest-ever investigation into mobile phone trading fraud draws to a close after five years.
The £250m case, codenamed Operation Euripus, investigated a series of mobile handset trades through a complex range of companies from May 2001 to August 2003.
Last week, at Southwark Crown Court (pictured), Taher Majid, Abdul Koser and Quentin Reynolds were found guilty of conspiracy to cheat the public revenue as well as money laundering charges. They will be sentenced in September.
Marcus Hughes pleaded guilty at an earlier hearing and was sentenced to six years in prison. He is already serving a 12-year sentence for drug smuggling.
In 2003, 350 HMRC officers took part in raids in the UK and Spain, which were described by customs officers as some of the largest to take place in the UK.
Large amounts of cash were seized during the raids, and a ton of cannabis was taken from one of the business addresses, resulting in 33 men and six women being arrested.
The raids even took place at Carphone Warehouse’s headquarters in west
London. Two members of Carphone Warehouse’s staff were cautioned and questioned during the visit from HMRC officers, but they were not arrested or charged.
A further series of raids were carried out in 2007, resulting in half-a-million documents being examined, along with the hard drives of 391 computers.
HMRC alleged that those charged had engaged in missing trader fraud, purchasing handsets from outside the UK then failing to pay the millions owed in VAT when the handsets were re-sold abroad.
Sixteen people were originally charged with cheating the revenue, and concealing and transferring the proceeds of criminal intent.
Euro ruling over VAT
A European Court of Justice ruling is pressurising HMRC’s policy of withholding VAT refunds for up to two years while carrying out anti-fraud enquiries.
A new European Court judgment states that tax offices should not withhold refunds for more than two months for an established trader.
The European Court of Justice was upholding a case brought by a Polish trader who had his VAT claim withheld pending extended verification without a decision being made.
The judgment of the court sets a precedent for UK traders to challenge extended verification periods of up to two years imposed in the UK by HMRC.
The court agreed member states had a legitimate interest in preventing tax evasion and abuse.