Two jailed for €84.5m mobile phone VAT fraud

TWO men have been jailed for a €84.5 million VAT fraud which was operated through an Irish company.

The scam, which ran from September 2000 to July 2001, involved buying mobile phones from fictitious British companies and then selling them to other mobile phone brokers with the proceeds going to Globalring Ireland Ltd, which was based in Cork.

Used car dealer Daniel Charles Jones, aged 47, from Ellesmere Port, Cheshire, and haulage company boss Jeffrey Woolley, 55, from Stoke-on-Trent, Staffordshire, were both jailed for defrauding British Revenue and Customs of £58m (€84.5m).

Jones, who ran a number of companies, including Globalring Ireland, received six years in jail on two counts of cheating the public revenue. His accomplice Woolley, who also appeared at Birmingham Crown Court, was sentenced to two years in prison.

British Revenue and Customs officers spent three years investigating the ‘carousel’ VAT fraud, a type of crime which they regard as a ‘priority issue’.

HM Revenue and Customs said such acts were a deliberate attack on the VAT system, perpetrated by organised criminals operating across and beyond the EU.

HM Revenue and Customs assistant chief investigations officer Hank Cole said: “The sentences imposed clearly illustrates that the courts agree this attack on the revenue system is a serious crime. The theft of revenue has a direct effect on the amount of money that is available to spend on public services like schools and hospitals.”

The mobile phones never found their way onto the market. They were simply used to perpetrate the fraud by using false receipts to charge VAT on transactions but the tax was never paid to the British government.

HM Treasury said the carousel VAT fraud was a version of the missing trader scam.

Describing the fraud, the Treasury said: “In essence, fraudsters obtain VAT registration to acquire goods VAT free from other (EU) states.

“They then sell on the goods at VAT-inclusive prices and disappear without paying over the VAT paid by their customers to the tax authorities.

“The fraud is usually carried out very quickly, with the fraudsters disappearing by the time the tax authorities follow up the VAT registration with their regular... activities.”

The ‘carousel’ version of the fraud occurs when goods that have been imported into Britain are sold through a series of transactions before being re-exported to another EU state.

“They may then be re-imported back into the UK,” the Treasury said.