A Yorkshire ex-policeman has admitted his involvement in a £300 million VAT fraud, believed to be the biggest case of its kind in UK history.
Nigel Cranswick, formerly of the South Yorkshire Police, had set up a company called Ideas 2 Go (I2G) of which he was the director. It purported to trade in mobile phones and software from a small office in a Sheffield business park.
Mr Cranswick claimed that his company traded £2 billion worth of goods in the eight months it was in business. However, the trades had all been fabricated in order to generate paperwork that recorded the fake deals and the VAT they incurred.
The prosecution documents read: "In its eight-month trading life I2G's business documentation reveals that it purported to buy and sell goods in many thousands of deals, to the value of at least £2bn.
"This included about £300m of VAT, which it was purportedly charged by its suppliers.
"The trade was not genuine and this £300m was the target of the defendants.
"Despite this phenomenal turnover of over £2bn, I2G operated from a very small and modest office accommodation in a Sheffield business park.
"The defendants, who were its officers and employees and purported to carry out billions of pounds of business, had no previous experience in either the mobile phone industry or in running any business on such a grand scale."
Mr Cranswick's accomplices were Brian Olive and Darren Smyth, who both admitted to the same charge as Mr Cranswick: conspiracy to cheat HMRC.
Clare Reid, Mr Cranswick's sister, admitted to two counts of false accounting and the four will be sentenced, along with another two defendants, next month.
Paul Rooney of the HMRC said: "This was a sophisticated fraud designed to steal hundreds of millions of pounds of tax.
"HM Revenue and Customs investigators unravelled a complex web of fake business transactions fabricated to conceal the massive financial fraud."
VAT-registered businesses are able to claim back the tax on goods and services they buy from HMRC. But when a company commits tax fraud, it means a financial loss for all sorts of things that tax money pays for: the NHS, schools, pensions and much more. If you suspect a firm is committing VAT fraud, you can report them in confidence on the Customs Confidential hotline 0800 595 000.
Related links:
Read more on the story (The Telegraph)
Read about fraud (FindLaw)
Find local tax solicitors throughout the UK (FindLaw)
