Maghera man jailed for role in English fuel-laundering scheme

A south Derry man was jailed for six years at Coventry Crown Court today for his part in a fuel-laundering scam.

Damian Mulholland (aged 39) of Beaver Crescent, Maghera, was sentenced with two other men, both from the British west midlands, who were arrested after customs officials mounted an undercover operation.

Brian O’Doherty (age 49) from Coventry got five years and Jagdevpal Singh (aged 41), from Wolverhampton, two and a half years.

The court heard how they were detailed following covert surveillance of how rebated oil (red diesel and kerosene), collected from a licensed distributor was laundered or mixed and then sold to the retail market as duty-paid road diesel and ultra-low-sulphur diesel.

They were also smuggling, laundering and mixing rebated oil (green diesel) from the Republic of Ireland.

After today’s hearing, Frank Jones, the British customs and excise assistant chief investigation officer said: ”Organised crime has a detrimental and harmful effect on all our communities as well as a damaging impact on our environment.

"We would urge anyone with information on fuel misuse or suspicious activities in their area to contact us in confidence straight away.”

The fraud involved the laundering and distribution of over four million litres of fuel over an eight-month period, which resulted in the evasion of over £2m (€3m) in excise duty and VAT.

In August 2004, 34,000 litres of kerosene was paid for in cash and collected in a number of fuel tankers driven by O’Doherty on behalf of Taz Construction of Derby, a company whose details had been hijacked.

The fuel was sold using a bogus company called Mac Oil based in Manchester, operated by others involved in the fraud.

During 2005, observations showed that after collecting the fuel O’Doherty drove to rural premises situated in the vicinity of Lizard Lane, Tong Forge, near Telford, Shropshire, and to warehouse premises in Measham, Swadlincote, Derbyshire.

O’Doherty was subsequently intercepted by police on the M6 driving a tanker containing 25,000 litres of illicit fuel. Fuel was also seized from the tanker’s running tank.

In March 2005, Customs officers executed a number of search warrants in the British midlands and arrested O’Doherty.

A mixing plant was dismantled and quantities of kerosene and green diesel were seized at the Tong Forge site. At the Measham warehouse a fully operating oil-laundering plant was dismantled and in excess of 34,000 litres of finished product (DERV) was seized.

O’Doherty was charged with involvement in fuel laundering and excise fraud. Follow-up enquiries, which included searches and arrests in the North and in Wolverhampton, established the involvement of organisers Mulholland and Singh in the fraud, the court heard.