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Latest efforts by HMRC to clampdown on carousel fraud have resulted in the arrest of 16 people, following a lengthy investigation into a multimillion pound VAT scam.
In a series of early morning raids across England and Wales, 13 men and three women were apprehended for their part in a £20 million money-laundering and missing trader intra community (MTIC) fraud ring, which HMRC had been probing for 21 months under the name Operation Vaulter.
The suspects — from north Wales, Cheshire, Greater Manchester, Staffordshire and East Sussex - are alleged to have imported huge numbers of mobile phones from EU countries, and then sold them on in the UK without paying VAT.
HMRC estimate that MTIC fraud cost the Exchequer between £2 billion and £3 billion in lost VAT receipts in 2005-06. Earlier this year, the Treasury revealed that of traders under scrutiny due to suspect VAT claims, 95% were found to be participating in carousel fraud, or there was sufficient suspicion to warrant further investigation.
HMRC spokesman Euan Stewart said: 'Tackling missing trader fraud is HMRC's top priority. We have a duty to protect the revenue given the scale and nature of the attacks we are seeing.
'The sophistication of the organised crime gangs behind these frauds means that our investigations are increasingly complex. This is not victimless crime; it's organised crime that causes real harm.'
