Six people have been sentenced for their role in a “complex and sophisticated” £20m fraud uncovered by HM Revenue and Customs following a 10-year investigation.
HMRC’s Operation Barbados probe focused on fake deals generated by Midlands-based Winnington Networks Ltd to offset value-added tax owed on genuine trade in electrical goods and wholesale metals.
Yesterday’s sentencings at Southwark Crown Court mean that a total of 13 people have now been jailed for the fraud across four related trials. All together, 20 people have been convicted, 11 of whom have also been disqualified from being company directors.
HMRC said a network of corrupt company directors had conspired to falsely offset their output VAT claims – and that Winnington Networks was at the heart of the fraud, deliberately understating how much VAT was owed between 2011 and 2014.
WNL generated VAT by creating price drops on metals and electrical items it sold through a chain of business transactions, then set about offsetting the VAT it had accrued.
It wrongly claimed to have sold Voice Over Internet Protocol services to UK suppliers as part of the fraud. Along with its co-conspirators, WNL recruited VAT-registered businesses to issue fake documents, in return for a share of the profits of the fraud.
A nationwide HMRC operation in March 2014 led to the arrest of 15 people, searches of 36 premises – including a property in Cyprus – and the winding up of three companies. WNL is one of those companies.
Crown Prosecution Service specialist prosecutor Alexander White said those sentenced yesterday had played important roles in stealing and laundering £20m from the UK taxpayer.
“Together with the other 13 convicted defendants, they helped operate a complex and sophisticated fake system of offsetting VAT payments to the HMRC, money which was meant for public services but was instead stolen for their own selfish purposes,” he said.
“The CPS has commenced proceeds of crime proceedings against all of these defendants to claw back this illegally obtained money.”
Richard Las, director of HMRC’s Fraud Investigation Service, said an incredibly complex fraud had been dismantled thanks to the “tenacity, skill and dedication” of the department's criminal investigators.
“I hope this sends a clear message to anyone involved in tax fraud that regardless of how complex it may be, we have the skills, resources and the determination to catch you and to bring you to justice,” he said.
“The scale of the prison sentences and the significant director disqualifications we have already secured shows how seriously the courts have treated this sustained and sophisticated attack on the UK tax system.
“Tax fraud is not a victimless crime. It steals money that funds the public services we all rely on and I’d urge anyone with information about any type of tax fraud or money laundering to report it to HMRC online.”
Among those sentenced yesterday was 63-year-old William Lindfield, of Cheadle, who was found guilty of conspiracy to cheat the public revenue and sentenced to seven-and-a-half years in jail. Vishal Chudasama, 42, of Olney, was convicted of the same offence and sentenced to three-and-a-half years in jail.
Former WNL finance director Neil Pursell, 61, of Stoke, was sentenced to nine years in jail at an earlier hearing after being convicted of charges related to the fraud. He was also disqualified from being a company director for 14 years.
A total of 19 sentencings have taken place in the case. One remains outstanding.