A gang of seven men who made fraudulent VAT claims over sales of caravan parts have been jailed following an investigation involving HMRC and several police forces.
Michael Davies from Staffordshire, described by HMRC as a 'career criminal' led the conspiracy to claim almost £257,000 in VAT repayments by inventing bogus sales of caravan parts and accessories.
The gang operated four companies including Lazydays RV Motorhomes in Market Drayton, Shropshire, and three companies set up purely to carry out the fraud and associated money laundering activities - Lorcan Steels in Newcastle-under-Lyme, Capital Consulting UK in Marple, Stockport and Sky Incentives in Altrincham, Cheshire.
In April 2010, the Department for Environment, Food and Rural Affairs (DEFRA) contacted the police regarding the misappropriation of payments totalling £1.28m, which were intended for a legitimate IT company based in Cannock. DEFRA discovered that the destination bank and bank account details had been deliberately altered and that payments had been diverted from the intended destination to a bank account in the name 'Lorcan Steels'.
This was the same company under investigation by HMRC for VAT fraud and the agencies joined forces to track the financial activities of the organised crime gang, leading to their arrests in a joint operation.
Gary Lampon, assistant director of criminal investigation for HMRC, said: 'Davies and his gang members operated a network of companies that supposedly traded internationally in large quantities of caravan parts and accessories. They deceitfully created false paperwork showing the goods had been sold in the UK through their string of companies, adding VAT on each transaction. They then tried to claim back the VAT that hadn't been paid in the first place, when the non-existent goods were exported.'
At Leeds Crown Court Davies was sentenced to 15 months imprisonment, comprising of 13 months jail for the VAT offences and two months for the money laundering. He was also disqualified from holding a company directorship for two and a half years. Other members of the gang received a range of prison sentences and community orders relating to the VAT fraud and the money laundering charges.
