(June 19, 2012) Three men have been sentenced to lengthy prison sentences for running a carbon credit tax racket that cheated U.K. taxpayers out of 39 million pounds ($US60 million) in just 69 days.
London: Tax fraudsters who established bogus companies for the purpose of importing VAT-free carbon credits, only to sell them with VAT included to unsuspecting buyers, are now behind bars.
Sandeep Singh Dosanjh, 30, Ranjot Singh Chahal, 35, and Navdeep Singh Gill, 31, all from southern England, were sentenced to 15 years in prison, 11, and nine-year terms respectively for their part in a fraud to pocket tax revenues that should have gone to Her Majesty’s Revenue and Customs but instead were laundered through offshore bank accounts and turned into spending money.
Mastermind Dosanjh’s earnings from the scam reportedly paid for a Rolls-Royce and a £1-million house in the heart of London.
As a direct result of this investigation – the three men were captured in a series of dawn raids in August 2009 – U.K. law was changed in a bid to ward off repeat scams of this type.
VAT fraud – dubbed by the mainstream media as ‘carousel fraud’ or ‘missing-trader fraud’ – has dogged the European Union’s carbon credit market for years. Forensic auditors and Europol warned that carbon credit markets would fall victim to fraud and organized crime.
At the time referring to billions of dollars lost to emissions-related tax fraud in 2010, Chris Perryman of Europol’s Criminal Finances and Technology section in The Hague said: “It is clear that [carbon trading] fraudsters are fully aware of the potential that trading in intangible commodities has to further their ends. Such goods or services can be traded without the need to be physically moved or transported, which represents an obvious opportunity to frustrate Law Enforcement efforts to track and trace transactions.”
As a result, France, the Netherlands, Spain – as well as now the U.K. – have all had to alter their tax law on carbon credit transactions.
Meanwhile, the European Commission has set up a special team of “cyber firefighters” in an effort to stamp out fraud in the EU Emissions Trading Scheme.