Ex-policeman collared in UK’s largest ever VAT fraud
- Published on Friday, 11 November 2011 16:06
- Posted by Scott Buckler
A former policeman from South Yorkshire has been jailed for 10 years and three months today for his part in an attempted £330 million VAT fraud - the largest of its kind in the UK
He and five others were caught by investigators from HM Revenue & Customs (HMRC) after they claimed their new business, Ideas 2 Go Ltd, had sold more than six million mobile phones and had a turnover of more than £2.4 billion in just eight months.
Using details from hijacked or fictitious companies the gang produced thousands of invoices for sales of mobile phones and computer software, producing billions of pounds in fabricated turnover, which generated around £330 million in fraudulent VAT repayments. Cranswick and his gang invented over 6,000 fake business transactions in an attempt to make the repayments appear legitimate.
Ringleader Nigel Cranswick, 47, from Dinnington in South Yorkshire went from ‘rags to riches’ in a matter of weeks. Heavily in debt and only weeks into his new business venture, he quit his job as a serving policeman and began splashing out on extravagant purchases. He made lavish improvements to his home, rented a luxury apartment in the Spanish town of Marbella and paid for private schooling and tennis lessons for his children.
Cranswick claimed that in the first six weeks of trading Ideas 2 Go had turned over more than £527million. The company had traded over £47million before they even got round to opening a bank account for the business.
Exchequer Secretary, David Gauke said:
“This Government will not tolerate dishonest people stealing public money. This sentence shows that those who try to commit fraud need to think again – HMRC will find you and the courts will punish you.
“The additional £917m we have invested in HMRC will see more cases like this successfully prosecuted, sending a clear and powerful message:”
HMRC Assistant Director for Criminal Investigation Paul Rooney comments:
“As a police officer Cranswick knew full well that he was breaking the law, yet; motivated by greed, he chose to overlook it for the opportunity of making what he wrongly assumed would be easy money. He now has to pay a very high price for his poor judgement and lack of integrity.
“This was a sophisticated fraud designed to steal hundreds of millions of pounds of tax, but it started to unravel when our investigations identified sales for more than 50,000 mobile phones, which the manufacturers hadn’t even begun producing in their factories.“
Other members of the gang included; Nigel Cranswick’s sister, Clare Reid (Smyth), 44, and her husband Darren Smyth, 42, both from Maltby, former railway trackman Brian Olive, 66, from Doncaster, former removal man, Thomas Murphy, 26, from Dinnington and 28 year-old former council housing officer, Andrew Marsh, from Sheffield.
The gang operated a number of scams in order to generate their illicit profit. They created false documents relating to the importation, sale and export of mobile phones and software systems. They hijacked the identities of legitimate companies and created fake customers and suppliers to try and give their business an air of legitimacy.
It wasn’t long before Cranswick began to reap the benefits of his crime. Following visits by HMRC, Cranswick; worried he had roused suspicion, emigrated to the Spanish town of Marbella. When he realised the company was under investigation he falsely claimed he was getting divorced in an attempt to protect his illicit assets.
Within days of registering Ideas 2 Go for VAT, Cranswick was contacted by HMRC compliance officers who raised concerns at his business practices and record keeping. Within a few months HMRC had identified that the business was indeed a scam and began to investigate.
Sentencing the gang today His Honour Judge Brian Forster QC at Newcastle Crown Court said:
This was an unprecedented attack on the public revenue… The figures in this case are astonishing and reveal a blatant nature of the fraud. They persisted in dishonest trading despite numerous warnings from HMRC.