Eight guilty following £1.28m money laundering investigation
Issued by North Yorkshire Police
A long-running investigation by North Yorkshire Police’s Major Fraud Investigation Team and Her Majesty’s Revenue and Customs came to a conclusion yesterday (11 July 2013) when the final member of an organised crime group was found guilty for his part in the money laundering of £1.28m stolen from the Department for Environment, Food and Rural Affairs (DEFRA).
Following the joint investigation which also included an attempt to defraud Her HMRC of £250,000, Michael William Bostock, 39, of Stafford, Robert Cann, 70, of Altrincham, Paul Tinsley, 37, of Stoke on Trent, Paul Edwards, 30, of Newcastle-Upon-Lyme, Michael Ian Davies, 48, of Stone, and Thomas Joseph Corridan, 51, of Loule, Portugal and Thomas Cottam of Deganwy, Conwy, were charged with money laundering the proceeds of the £1.28 million theft from DEFRA in York.
Yesterday (11 July 2013) at Leeds Crown Court, Thomas Corridan was found guilty of the offence of money laundering after a three week trial.
Bostock, Cann, Tinsley, Edwards and Cottam pleaded guilty to all charges in the first few days of their trial at Leeds Crown Court which began on 28 May 2013. Davies had previously pleaded guilty on 17 May.
Cann, Tinsley, Edwards, and Davies also pleaded guilty to an attempted cheat of £250,000 from the HM Revenue and Customs in relation to an attempted VAT reclaim fraud.
The charge relating to VAT fraud against Bostock was ordered to remain of file by the court. Corridan and an accountant, Paul Summers, of Marple, Stockport were found not guilty of this attempted cheat by the jury.
Another man, Lester John Stacey, 49, of Stoke-on-Trent, pleaded guilty to recklessly signing a VAT reclaim form in respect of the VAT offence.
All of the eight guilty parties were members of an organised crime group based in the Stoke-on-Trent area and Portugal.
The group set up a number of bogus companies with the intention of making false claims for VAT. While their plans to defraud HM Revenue and Customs failed due to the vigilance of HMRC, they used the structures they had created to launder the £1.28m stolen from DEFRA.
In March and April 2010 a total of just over £1,280,000 was stolen from DEFRA through the alteration of the details of a payee account on the DEFRA database. Money was diverted into an account of one of the bogus companies set up by the defendants called Lorcan Steels Limited.
Although it was not possible to prove who was responsible for the alteration of the database, the stolen money was laundered in a variety of ways by the conspirators and the account into which the money was transferred was rapidly depleted of funds – within less than two months.
The money was used to purchase large quantities of gold, expensive cars, and in part, was transferred out of the jurisdiction of the UK and into the account of a company based in Portugal, controlled by Thomas Corridan. Other bogus companies including Sky Incentives Limited were involved in the laundering process.
Two of the vehicles purchased with the cash, a Porsche 911 and a Range Rover Vogue were both recovered by North Yorkshire Police under a restraining order. The proceeds of their sale will form part of a future confiscation hearing.
Detective Inspector Ian Wills, Head of North Yorkshire Police’s Financial Investigation Unit, said: “This was a challenging investigation into what was a very sophisticated attack upon the DEFRA payment system.
“Early in the inquiry it became apparent that HMRC had an interest in the organised crime group who were responsible for these offences.
“A decision was made to combine resources and mount a joint prosecution. The benefits in using the resources of both organisations helped to achieve the positive outcome at court and reflect the full roles of those involved.
“I would like to pay particular tribute to the skills of my investigation team and also thank officers from the Staffordshire Police Economic Crime Unit who provided invaluable assistance.”
Michelle Potts from HMRC added: “VAT fraud is a serious criminal offence and HM Revenue and Customs (HMRC) is committed to catching people who commit this crime and bringing them forward so that justice can be served. Anyone with information about those involved with VAT or other types of tax fraud can contact us on 0800 59 5000 to report it”
VAT fraud
The gang, with the exception of Cottam and Corridan conspired to cheat HMRC, the government department responsible for collecting tax in this country, of over £250,000, by exploiting an aspect of the VAT system called zero-rating and making a fraudulent application for the repayment of Value Added Tax.
Although that application was made through an existing trading company called Lazydays RV Motorhomes (a company based near Market Drayton in Shropshire) the conspirators, to evidentially support the application, set up a fictitious evidence trail involving the creation of false documents and three bogus companies with associated bank accounts, between which money was in fact transferred to create the impression that a series of 10 deals, involving the sale and purchase caravan accessories, had taken place.
Bogus companies were established to be used purely as vehicles of fraud; they were called Capital Consulting UK Limited, Sky Incentives Limited and Lorcan Steels Limited.
The deals were a complete fiction or sham and never took place and the money was merely circulated between the companies to give the appearance of proper payments having been made. The VAT reclaimed was therefore never paid. Fortunately that conspiracy did not succeed in its objective, and following a compliance check by HMRC the application was disallowed.
Sentencing
Cann, Tinlsey, Edwards, and Cottam will be sentenced at Leeds Crown Court on 7 and 8 August 2013.
Corridan will be sentenced at Leeds Crown Court on 15 August 2013.
Davies and Bostock, who are both serving lengthy prison sentences for a previous offence of cheating the revenue will be sentenced on a date to be fixed in the autumn. Stacey will also be sentenced at this time.
A time table to confiscate the assets of the guilty parties will be set at the time of sentencing.
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