Specialist Tax Fraud Defence Lawyers at Bark & Co Solicitors Selected to Represent 4 Individuals in alleged Organised Crime Group Charged with Conspiracy to Cheat the Public Revenue
Operation Eider II
We are acting for four individuals charged in relation to an alleged Conspiracy to Cheat the Public Revenue, committed between January 2017 and March 2022, through a well-defined, highly sophisticated infrastructure set up and operated by an Organised Crime Group.
This is a joint investigation between Police and HMRC, with the Police taking the role of primary prosecuting agency. The HMRC have provided evidence explaining the Labour Supply VAT and Construction Industry Scheme frauds involved. These identify the total loss to the Public Revenue over the alleged conspiracy period as £21.8m.
The allegations are that core companies set up by the OCG were used to execute a large-scale CIS and Labour Supply VAT fraud in the construction and logistics industries. In order to mask thiss, they deployed different, paid “Front Directors”, as they discarded and set new companies up over time.
The Modus Operandi was that these consecutive core companies (on paper entirely unrelated and covertly run by the OCG behind the various “Front Directors”) would be inserted into the same labour supply chains. The core companies would sit between otherwise legitimate construction and logistics companies and their sub-contracted labour (scaffolders/drivers for example). This enabled the core companies to charge the customer companies VAT on the “supply of labour” and where applicable make deductions under the Construction Industry Scheme from end sub-contractors.
It is alleged that all the core companies have failed to comply with their obligations to declare and/or pay over the due VAT or CIS tax which they have taken in. In fact, in the majority of cases, no VAT returns have been submitted at all. Instead, this residual undeclared and unpaid tax generated every week was distributed amongst a number of complicit beneficiaries.
In order for the OCG to pay out the criminal benefits in cash, they required a method by which to realise their criminal “profits” (the unpaid tax) remaining in their core company bank accounts into cash reserves from which these could be paid. This was achieved in a number of ways over the Conspiracy period – but most commonly via substantial transfers to UAE-based companies.
