Twenty-One People Jailed in the UK for Mobile Phone Smuggling

Twenty-one people have been jailed in the UK for a collective 133 years after being convicted for stealing £138 million in tax fraud - typically involving shipping mobile phones to evade sales taxes. The UK's HM Revenue & Customs (HMRC) carried out three separate investigations, one involving four people; a second which involved twelve people and a third involving seven men.

The investigation by the HMRC began in 2001, resulting in two separate trials, into what has become known as carousel or 'missing trader' fraud. This involved the dishonest manipulation of the VAT system through the import and export of mobile phones.

The fraud involved the import of mobile phones from various EU countries, VAT free, or a paperwork trail which suggested that imports had taken place. It was likely, in many instances, that the goods described in the documents did not even exist. The paperwork showed the goods would then be sold more cheaply, but with VAT added, through a chain of companies (known as 'buffers') each involved in the plot and sham invoices would be issued. Once the goods had been sold on a number of times they would be exported back to EU countries. This was facilitated by a corrupt freight forwarding company who provided apparent independent confirmation of the legitimacy of the trade and false paperwork on the transport of the alleged goods. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods.

On of the convicted men, Craig Johnson had used the proceeds from the crime to buy a £3 million country mansion, Meaford Hall - which has now been seized by the HSRC, along with a helicopter, a yacht, two properties including Meaford Hall, Stoke, performance vehicles - a Ducati, Aston Martin, Ferrari and two Bentleys, Rolex watches and diamonds.

Posted to the site on 2nd October 2008