Six arrested over construction fraud

4 Feb 2010, 17:01

Michael Hunt

Six people from the North West were arrested in dawn raids this morning on suspicion of major VAT repayment fraud linked to the construction industry.

In Cheshire, two men and one woman were arrested as two residential properties were searched. In Manchester, three men were arrested with four residential properties being searched.

A further six more people were also arrested in Stoke on Trent and Ipswich as part of the operation by criminal investigators from HM Revenue & Customs. The operation was supported by police forces across each of the regions.

Those arrested are believed to be part of an organised crime gang purporting to trade in construction industry equipment and concrete crushing machines in a version of 'missing trader' fraud totalling over £2m. This sees the creation of a contrived chain of companies, which reclaim VAT they have never actually paid on the sale of equipment in the UK and when the goods are exported. It is thought the goods never even existed.

Twelve search warrants were carried out, eleven at residential properties and one at a business property, in Staffordshire, Cheshire, Manchester and Suffolk. Paperwork including bank accounts and computers were seized along with live ammunition, CS spray and an imitation firearm.

All defendants were arrested on suspicion of conspiracy to cheat the revenue and money laundering offences under Proceeds of Crime Act 2002 and are currently being questioned by HMRC criminal investigators at police stations across the UK.