Thursday, 9 September 2010

Taxman claims first cases of missing trader fraud in energy

The first suspected cases of attempted missing trader fraud in the gas and
power sector have been identified by the tax authorities – a year after the
carbon trading industry was hit with a €5bn (£4.2bn) attack.
Fraudsters looking to steal value-added tax (VAT) on the items are believed
to have switched their target from carbon allowances to traded gas and
electricity contracts. Missing trader fraud, also known as "carousel" fraud, typically involves
goods such as mobile phones and computer chips imported VAT-free from
European Union member states. These are then sold in the UK, including a VAT charge, but the trader then
goes missing without paying the taxman. The Treasury abolished tax on carbon allowances last year, instantly
eradicating the fraud. But the gas and power market also provides high
value, high volume and intangible items suitable for missing trader fraud. Steve Pope, deputy national co-ordinator for missing trader fraud at HM
Revenue & Customs, said the first examples of the fraud had been spotted
early and "snuffed out". But he warned that it had the potential to grow like the carbon credit fraud
and urged energy traders at investment banks and utilities to be alert to
the warning signs. "Carbon credit missing trader fraud took off very quickly and the level of
activity we saw was £100m in a matter of weeks," he told The Daily
Telegraph. "It's only a threat at the moment. But we want traders to be aware of the
risks and we will do as much as we can to help anyone who suspects there has
been missing trader fraud." Asked whether HMRC will pursue a prosecution of the cases it has discovered,
Mr Pope said: "We will consider all options. We will take all the
appropriate action necessary." Last year, seven people were arrested and 27 addresses raided by HMRC over a
suspected £38m fraud involving the trade of carbon credits to avoid paying
VAT. Then in April this year, a major cross-border investigation into alleged
fraudulent trading of carbon credits resulted in 22 UK arrests in a case
linked to raids at Deutsche Bank. More than 2,450 UK and German tax officers were involved in the operation,
with 81 house and office searches. The UK investigation saw 13 arrests in
England and eight in Scotland. Europol, the cross-border law enforcement agency, estimated last year that
carbon-trading fraudsters may have accounted for up to 90pc of all market
activity in some European countries. It said criminals mainly from Britain, France, Spain, Denmark and Holland
are estimated to have pocketed €5bn.

No comments:

Post a Comment