Tax fraudsters sentenced for £46m wine scam

A pair of London fraudsters, who evaded £46.5 million in tax by smuggling wine into the UK, have been sentenced for a total of 17.5 years.

Livio Mazzarello, 57, and Louisa Mbadugha, 59, who ran The Italian Wine Company Ltd from premises in Neasden, lied about the quantity of wine they imported and sold to evade excise duty and VAT.

An investigation by HM Revenue and Customs (HMRC) found the pair used false paperwork and re-used import documents to smuggle large quantities of wine into the country from Italy.

They sold the smuggled wine to retailers across the UK and Mazzarello laundered the proceeds of the fraud through the company using a string of bank accounts.

Both were found guilty of the offences on 8 June 2017. Mbadugha was jailed for three and a half years at the Old Bailey on 14 July 2017. Mazzarello, who absconded during the trial, was sentenced in his absence at the same court to 14 years on 30 June 2017.

Simon York, Director, Fraud Investigation Service, HMRC, said:

“Mazzarello and Mbadugha thought they had developed the perfect scheme to divert millions of pounds from public finances. They were stealing from the taxpayer and undercutting legitimate traders.

“The money they stole should have gone to fund vital public services, not straight into their pockets. They believed they could continue without fearing their criminal activities would be detected. They were wrong and we are working to reclaim any money they made from their crimes.

“We urge any member of the public who may have information about Mazzarello’s whereabouts or anyone committing tax fraud to get in contact with us by calling 0800 788 887.”

In April 2013, HMRC and the Italian Customs Authority conducted a number of co-ordinated searches and arrests in the UK and Italy. HMRC officers seized 70,000 litres of duty free wine and around £350,000 in cash, hidden in a concealed floor safe and above ceiling tiles at the company’s Neasden warehouse during the searches.

The extent of the fraud, committed between 6 June 2008 and 17 April 2013, is estimated at £46.5 million. Proceedings are underway to reclaim any profit obtained from these crimes.

Upon sentencing Louisa Mbadugha, His Honour Judge Philip Katz QC, said:

“You were foolish to be charmed by crooks. Your role (in keeping records) was critical otherwise this fraud could not have happened. Going to prison will have a profound effect on those you know and your standing in the community which has been destroyed.”