VAT fraud gang ordered to repay more than £114m criminal profits

Four convicted fraudsters, who were part of an 18-strong crime gang involved in a vast mobile phone VAT fraud, have been ordered to repay more than £111 million in criminal profits.

Ongoing proceedings by HM Revenue and Customs (HMRC) and the Crown Prosecution Service (CPS) have resulted in confiscation orders against 16 members of the gang, totalling more than £114.9 million.

Key organisers of the fraud, father and son, Geoffrey and Gareth Johnson have been ordered to repay more than £109 million jointly. The pair are currently the subject of international arrest warrants after absconding prior to their trial.

Co-conspirator, Sarah Panitzke, 42, of Barcelona, Spain, was ordered to repay over £2.4 millionor serve more time in jail. Panitzke is also on the run.

Alison Shelton, 43 of Staffordshire, who is currently serving a nine-year jail sentence for her part in the fraud, was ordered to repay £83,000.

The investigation by HMRC led to four criminal trials between 2012 and 2014. The 18 gang members from: Cheshire, East Sussex, Greater Manchester, Lancashire, North Wales, Staffordshire, Scotland and Spain, were jailed for a total of 135 years.

Kevin Newe, Assistant Director, Fraud Investigation Service, HMRC, said:

“Confiscation orders totalling more than £114 million have now been made in this case, and these latest rulings show that criminals may think they can escape justice by fleeing the country, but our investigations to reclaim their ill-gotten gains continue. We are determined that crime gangs such as this one, should be prosecuted and then made to repay their criminal profits.”

Nick Price, Head of CPS Proceeds of Crime, said:

“Today’s orders again illustrate that the CPS will work closely and tenaciously with our criminal justice partners to go after the assets of those who engage in large-scale fraud, and even in the case of those who wilfully abscond from the proceedings.

“Our work does not stop here. We will continue to engage with our partners in the UK and around the world in working towards the realisation of the assets in this order. We are determined that crime will not pay.”

Since sentencing, other gang members who profited from the fraud, have appeared before His Honour Judge Campbell at Kingston Crown Court to face individual confiscation orders.

The gang claimed to be legitimately importing and selling mobile phones but investigators established that this complex web of transactions was a sham involving non-existent phones. Their ‘business’ was simply a vehicle for fraudulent VAT repayment claims.

HMRC also discovered that the gang had made complex arrangements to hide their criminal profits, laundering through various bank accounts in Andorra, Dubai, Hong Kong, USA, Switzerland, Portugal and the UK. As part of the investigation and recovery of the stolen tax HMRC and CPS retained assets and £300,000 in cash.