Record
producer Stephen Pigott, whose credits include Celine Dion, Rod
Stewart and The Pet Shop Boys, will spend nine years in prison,
while former New York environmental judge, Stacy Haber-Hofberg, was
sentenced to six years. Joanna Harris and Theresa Igbanugo, both
from London, were each sentenced to three and a half years in
prison.
All four were charged with money laundering and cheating the
public revenue with intent to defraud for their participation in a
type of fraud known as missing trader fraud.
Missing trader fraud occurs where fraudsters obtain
VAT registration to
acquire goods VAT-free from other Member States. They then sell on
the goods at VAT inclusive prices and disappear without paying over
the VAT paid by their customers to the tax authorities.
The most abusive form of the fraud is "carousel" fraud, where
the same consignment of goods is sold through a series of contrived
transactions back and forth between Member States in order to steal
the sums charged as VAT every time the goods go around the
circle.
On this occasion the fraud involved buying mobile phones from
three fictitious companies and using false receipts to charge VAT
on the transactions. The proceeds from this crime were then sent to
the Hong Kong bank accounts of a number of companies created to
perpetrate the fraud.
These companies were in fact clones of existing
British-registered companies dealing mostly in mobile phones. The
four accused issued fraudulent invoices in the names of the
existing British companies, and VAT was charged on those invoices
under their true VAT registration numbers.
The invoices were manufactured to resemble those used by the
real companies, often by means of downloading logos and other
details from the internet. Buyers were instructed to make payment
to the Hong Kong accounts. The funds could then be electronically
dispersed.
"It was an audacious and outrageous fraud, said Her Honour Judge
Williams, passing sentence at Canterbury Crown Court on Friday.
“All defendants showed a shameless dishonesty," she added.
Assistant Chief Investigation Officer Deborah Hayman warned that
the HMRC would vigorously pursue those involved in similar
frauds.
"Tackling Missing Trader Intra-Community fraud is HMRC's top VAT
priority. It is a deliberate attack on the VAT system, perpetrated
by organised criminals operating across and beyond the EU. The
sentences imposed today clearly illustrate that the courts agree
that this attack on our Revenue systems is serious crime,” she
said.
