16 people arrested in investigation of tax fraud

On September 4, 2007, 16 people were arrested in a series of morning raids carried out by British Customs and Revenue officers. This was a part of investigation of a suspected pounds GBP 20 million VAT fraud.

This operation came after a 21-month inquiry into so-called “carousel fraud” and money laundering. It covered a large territory as the addresses of the arrested were located all across England and Wales.

All the 16 people are now being questioned by police.

Customs officers think that they are part of an organised crime group that is dealing with “carouselling” of mobile phones across the European Union. “Carouselling” suggests buying low-volume, high value goods VAT-free from EU countries, and then selling these goods (e.g. mobile phones) in the UK without paying VAT.

According to estimations by Revenue and Customs, in 2005-2006 this type of fraud could cost GBP 2-3 billion.

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