Tax fraud gang jailed

Date: 27th May 2010

A warning has been issued to businesses and individuals operating outside of the UK's tax laws after 21 people were sentenced for their part of a £37.5 million tax fraud.

HM Revenue & Customs (HMRC) has published details of what it called one of the most complex investigations in its history.

HMRC began Operation Devout in 2002 to investigate the "dishonest manipulation" of the UK's VAT system at a number of companies.

The companies were being used as a "complex chain" to avoid VAT payment, HMRC explained.

After seven trials and retrials, the members of the gang have been handed prison sentences ranging from 18 months to seven years.

Adrian Farley, assistant director of criminal investigation for HMRC, said: "This was not some kind of victimless crime, but organised fraud on a massive scale by criminals masquerading as legitimate businesses all bent on making fast and easy profits at the expense of the British taxpayer.

"Multiple businesses and bank accounts were deliberately set up to carry out the fraud and hide the proceeds of these crimes."