(Corrects total sentence in headline.)
Three members of a U.K. gang seeking to steal “as much money as possible” from the public purse in a value-added tax fraud involving carbon permits were sentenced yesterday to a total of 35 years in jail, the government said.
Sandeep Singh Dosanjh was jailed for 15 years, Navdeep Singh Gill for 11 years and Ranjot Singh Chahal for nine years, Her Majesty’s Revenue and Customs said today in a statement on its website. Four other people were acquitted, Sara Pont, a spokeswoman for HMRC, said by phone today.
The gang set up a chain of bogus companies in order to trade fraudulently in European Union emissions allowances, stealing around 38 million pounds ($60 million) through a “complex missing-trader fraud” in a six-month period starting in January 2009, according to the statement. Europe lost about 5 billion euros ($6.3 billion) in revenue for the 18 months ending 2009 because of the CO2 VAT fraud, according to an estimate by Europol, the European law-enforcement agency.
“This was a deliberate attempt to steal as much money as possible from the public purse by a criminal gang interested only in lining their own pockets,” Chris Martin, an HMRC criminal investigations official, said in the statement. “HMRC will not stand by and let crooks rip off honest taxpayers. The message is clear: if you attempt to defraud the Exchequer, we will track you down and bring you to court.”
The gang was arrested by HMRC officers in a series of dawn raids in August 2009, the government said. The law was changed to prevent carbon permit VAT fraud because of the investigation, it said.
Bogus Import Companies
After the bogus companies imported the carbon permits free of VAT into the U.K., they sold them on, charging VAT which was never paid to HMRC, and then dissolved the importing companies, according to the statement. The allowances were then sold on again between three further so-called “buffer” companies, which were also run by the gang, HMRC said.
They were finally offloaded to legitimate companies so the trading chain appeared legal, according to the statement. The VAT charged by the “missing trader” was then shared out between the gang. Buyers included BP Plc (BP/), Royal Dutch Shell Plc (RDSA), Deutsche Bank AG (DBK) and Morgan Stanley (MS), Michael Parroy, a prosecution lawyer, said in March this year.
The trades were made in a matter of minutes via computer and the stolen VAT was transferred to offshore bank accounts in the United Arab Emirates to “clean” the stolen cash, which the gang spent on luxury cars and an expensive London home, the government said.
“Confiscation proceedings are under way to ensure that the criminals do not profit from their crimes,” it said.
To contact the reporter on this story: Mathew Carr in London at firstname.lastname@example.org
To contact the editor responsible for this story: Lars Paulsson at email@example.com