57 years for Carousel Quartet

HM Revenue & Customs scored an important prosecution this week with the conviction of four men guilty of £10m worth of carousel VAT fraud.
The fraudsters were sentenced to a total of 57 years in jail on Friday after being found guilty earlier this week of evading £10 million in VAT and the laundering of the proceeds.

Durgesh Mehta, director of Virgini Ltd, was jailed for a total of 33 years. He was convicted on one count of cheating the public revenue (10 years), three counts of money laundering (5 years on each count) and of conspiracy to transfer criminal property under the Proceeds of Crime Act (8 years). He  will only serve 10 years as all five sentences will run concurrently.

Gerald Reardon, Matthew Sharman, and Peter Ratcliff were all convicted of conspiracy to transfer criminal property under the Proceeds of Crime Act and sentenced to 8 years imprisonment.

Between July 2003 and October 2003 HMRC paid Virgini Ltd VAT repayments of £7 million based on the purchase of mobile phones that were then allegedly exported to Kyiv in the Ukraine. The total VAT claimed by Virgini Ltd in the four months totalled £10 million.

Readon, and Sharman laundered funds derived from the £10 million VAT fraud through a business bank account of an offshore company, controlled by Readon, called Gazelle Corporation Ltd.

Debbie Hayman, Assistant Chief Investigation Officer for HM Revenue & Customs (HMRC) said: "This sends out a clear message to those involved in missing trader, or carousel fraud as it is commonly known, that we are committed to tackling VAT fraud. Tax fraud is not a victimless crime, it is criminal theft of revenue needed to fund our country’s public services."

HMRC investigators from Dover uncovered the fraud in November 2003 when they seized just under a million pounds in cash being delivered to Gerald Reardon and Matthew Sharman.

Various sums of money were transferred from Virgini Ltd to the accounts of the Fone Connection Ltd and Hatherley Enterprises Ltd. Both of these companies were controlled by Peter Ratcliffe, and this money was transferred to a broker in Holland.

Further enquiries in Holland revealed Dutch authorities were investigating the Dutch brokers for money laundering. HMRC investigators obtained evidence of Ratcliffe’s and Sharman’s connections to the brokers along with the Gazelle Corporation Ltd.