Multi-Million Dollar Phone Tax Fraud Blocked

A suspected EUR165 (US$212) million phone fraud has been disrupted during a joint UK and German operation against VAT carousel fraud. Codenamed 'Operation Sunrise', mixed teams of UK and German customs officers were deployed on the Swiss - German border and at Frankfurt airport to gather intelligence about the movement of goods into the European Union.

Over 30,000 mobile telephones were scanned by Detection officers from HM Revenue & Customs (HMRC) and German Customs Investigation Zollkriminalamt (ZKA) during Operation Sunrise and inputted into HMRC's 'Nemesis' database. The operation was devised to capture data about mobile telephones and their movement into the EU from third countries. Telephone serial numbers are recorded and compared with others on the database in order to uncover and provide evidence of carousel transactions. To date, more than 1.6 million unique identifier numbers have been recorded.

Carole Upshall, HMRC Detection Senior Manager, said "Carousel fraud isn't a victimless crime or a clever accounting trick, it is criminal theft of tax revenues needed to fund our country's public services. Close working with our counterparts from the German Customs Investigation and VAT authorities is part of our commitment to tackling MTIC fraud.

"Tracking those commodities that are to be used to make fraudulent VAT claims across EU borders is only one element in our anti-MTIC strategy but it is an excellent example of the kind of international co-operation that will enable us to tackle carousel fraud quickly and effectively."

Operation Sunrise was the first of its kind. Activity focused on the Swiss German border, as this is a common route used to reintroduce goods previously involved in fraud and exported to a third country back into the European Union to be used in further frauds.

Data suggests that in 2005 mobile telephones to the value of EUR2.1 (US$2.7) billion were imported into Germany from Switzerland, despite there being no manufacture of mobile telephones there, and no obvious commercial reason for such trade."

Posted to the site on 1st September 2006