Home >> Tax News >> VAT Fraud: Ex-copper commits £300m VAT Fraud
Added 13 October 2011
Nigel Cranswick, 47, a former member of the South Yorkshire Police department, for 8 years from 1997-2005, headed an elaborate VAT fraud scheme as the director of mobile phone and computer software company Ideas 2 Go (I2G).
I2G was run from a ‘modest office’ on a business park in Sheffield. The company was said to of traded £2bn of goods over a short period of just 8months.
Cranswick has admitted that the goods for sale were fictitious and that the company was set up to claim money in VAT from the Revenue (HMRC) by using paperwork from ‘false’ sales.
The VAT fraud case is believed to be one of the biggest of its kind in court and has been under HMRC investigation for the past five years.
Prosecution documents state that the £300m of VAT was “purportedly charged by its suppliers”, that the “trade was not genuine” and the defendants had “no previous experience in either the mobile phone industry or in running any business on such a grand scale.”
Cranswick along his business partners, Brian Olive, 56, and Darren Smyth, 42, both also his brother-in-laws, all pleaded guilty to the charge of conspiracy to cheat HMRC.
HM Revenue and Customs (HMRC) assistant director for criminal investigation, Paul Rooney, said:
“This was a sophisticated fraud designed to steal hundreds of millions of pounds in tax.
“HMRC investigators unravelled a complex web of fake business transactions fabricated to conceal the massive financial fraud.”
Before starting up I2G Cranswick and his wife, Nicola, were in debt of £42,000, excluding their mortgage.
A few weeks after setting up VAT fraud company I2G, the Cranswicks were apparently able to afford lavish furniture, expensive garden landscaping and fancy portraits amounting to over £10,000.
Stating that the I2G’s supposed turnover of £2bn in less than a year was ‘pure fantasy’,
“Nobody, not even the simplest of men, could have ever believed that such a turnover could be achieved illegitimately.”
The above figure is said to have been based on the fictitious trading of around 4.6m mobile phone handsets.
I2G is realistically believed to have turned over £527m profit in the company’s first six weeks of trading.
On his personal website – Cranswick can be seen pictured as the front man for his indie band, Not the Police.
In lyrics to his song, ‘Hit and Miss’, Cranswick ironically sings:
“I’m in trouble, falling down a hole. How I got here, I won’t ever know.”
Sentencing for the VAT fraud is due to take place next month.
Kevin Kinsella Jnr, of KinsellaTax, said:
“It will be interesting to see how this VAT fraud case carries out and amount of tax that is recoverable by the Revenue.
If HMRC has investigated the VAT fraud case for the last five years and given the sums involved, one would expect lengthy prison sentences to be given to guilty parties involved.”
KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully experienced inHMRC investigations.