The director of an Essex- based mobile phone wholesaler has been disqualified for 15 years, after an Insolvency Service investigation found he had deliberately participated in transactions which were connected with VAT evasion
Mark Robert Cook, director of Crouch Commodities Ltd., either knew or should have known about the connection to VAT fraud. Between April and July 2006 he caused the company to fraudulently claim £19,376,461 from HMRC for four input tax reclaims for VAT periods March to June 2006.
This disqualification follows investigation by the Public Interest Unit, a specialist team of the Insolvency Service, whose involvement commenced with the winding up of the company, for unpaid VAT owed to HMRC.
The investigation found that the company participated in ‘missing trader fraud’. This is commonly known as carousel fraud, as large consignments of electrical or other small item size high value goods are invoiced quickly and repeatedly around trading chains, speeded up by movement on paper, with actual movement of goods only taking place as they enter or exit the UK.
The missing trader fraud was discovered by the quick succession of same day trades without deliveries within the UK of goods sitting at a shared freight forwarder, the common use of the same offshore bank, and entering into payment arrangements involving third parties who were neither suppliers nor customers.
The bank used was First Curacao International Bank which was shut down by the Netherlands Antilles authorities in September 2006 in order to prevent money laundering.
Anthony Hannon, official receiver in the Public Interest Unit, part of the Insolvency Service, said: ‘Crouch Commodities Ltd was involved in trading and making wrongful reclaims in a fraudulent VAT scheme which had been costing the UK Exchequer significant amounts of money at the time the fraud was perpetrated.
‘Regulatory changes, investigative action and legal proceedings have reduced the scale of this fraud from 2007 onwards.’
HMRC background note:
Most businesses pay their taxes, but when a business goes under, the public purse may be left with large irrecoverable tax debts. HMRC, like any other creditor, has a duty to work with insolvency practitioners to work out whether the directors acted correctly at all times.
From 6 April 2012, HMRC can require employers to pay a security where there is serious risk, based on past behaviour that they will not pay their PAYE or Class 1 NICs.
