21 people were arrested today in dawn raids by HM Revenue & Customs (HMRC) officers investigating a multi million pound construction industry fraud.
Eighteen men and three women from the West Midlands, Staffordshire, London and Manchester were arrested on suspicion of conspiracy to cheat the public revenue and money laundering offences amounting to over £6 million. They are currently being questioned by HMRC criminal investigators at police stations across the UK.
The plot is believed to have been orchestrated by organised crime gangs in a bid to steal millions of pounds in a complicated conspiracy through a version of ‘missing trader’ fraud. This sees the creation of a contrived chain of companies, which claim to subcontract labour for the construction industry, with the sole intention of disappearing before paying the taxes due to the public purse. They pocket the money and hijack legitimate companies along the way.
The conspiracy exploits individuals working in the construction industry and abuses the government scheme that regulates the industry’s tax affairs. It is thought thousands of construction site workers may have been robbed of the tax and national insurance contributions they believe they have paid over the last six years.
Adrian Farley, Assistant Director of Criminal Investigation for HMRC, said:
“Today’s arrests are the result of strenuous efforts by our teams of dedicated officers to disrupt the sophisticated scams of organised crime gangs behind money laundering activities. This conspiracy by a number of contractors is believed to have resulted in the theft of over £6 million from the public purse, depriving vital public services of much needed investment. We are committed to bringing them to justice and to deprive them of the proceeds of their crime.”
The arrests were made on suspicion of conspiracy to cheat the public revenue and money laundering offences under the Proceeds of Crime Act 2002. The Act was specifically designed to take the profit out of crime, making it harder for money to be laundered and depriving criminals of their illicit wealth.
Over 40 search warrants were executed at residential and business premises in the West Midlands, Staffordshire, Nottingham, London and Manchester. Further searches are underway.
Cash totalling £73,000 has so far been seized along with paperwork including bank accounts and computers, Class A drugs and associated equipment.
HMRC investigators were supported by West Midlands Police today in this Viper Operation - a new approach to tackling serious organised crime. It involves a very structured and carefully co-ordinated response, taking a broader view and using every resource available to attack the criminal - not just the crime.
West Midlands Police Asst Chief Const Suzette Davenport said:
"Today, officers from the West Midlands Police Region have worked closely with and supported HM Revenue & Customs (HMRC) in this operation. Viper operations involve law enforcement agencies working together to protect communities in a different way which in turn means our opportunities to disrupt and intervene are increased. We are leading the country with this new approach.”