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2:15 pm, February 4, 2010
Manchester and Cheshire arrests in major VAT fraud probe

Six people were arrested in dawn raids in Manchester and Cheshire today on suspicion of stealing more than £2m via a VAT repayment fraud linked to the construction industry.

The operation by criminal investigators from HM Revenue & Customs (HMRC), supported by police forces across the regions, involved 12 arrests altogether, including others in Staffordshire and Suffolk.

Adrian Farley, assistant director of criminal investigation for HMRC, said: “Today's arrests are a result of many months of investigation across the UK to unravel what is believed to be a major fraud.

“One of our key priorities is to identify the abuse of our tax systems by organised crime gangs stealing vast amounts of public money for their own gain. Working closely with other law enforcement agencies we will unravel cases of complex fraud and bring those responsible before the courts.”

Those arrested are believed to be part of an organised crime gang purporting to trade in construction industry equipment and concrete crushing machines in a version of “missing trader” fraud. The fraudsters create a contrived chain of companies, which reclaim VAT they have never actually paid on the sale of equipment in the UK and when the goods are exported. Investigators believe the goods never even existed.

In today's raids, paperwork including bank accounts and computers were seized along with live ammunition, CS spray and an imitation firearm.

In Cheshire, two men and one woman were arrested and two homes searched; while in Manchester, three men were arrested and four homes searched.

HMRC said all defendants were arrested on suspicion of conspiracy to cheat the revenue and money laundering offences under Proceeds of Crime Act 2002 and are currently being questioned by at police stations across the UK.

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