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By | John Oates 22nd September 2006 15:11

Customs jumps on carousel fraudsters' favourite bank

Follow the money...

Her Majesty's Revenue and Customs (HMRC) is claiming a major victory over carousel fraudsters after discovering they were all using the same bank.

Every fraudster who had his collar felt in the last two years for carousel fraud had an account with the First Curacao International Bank (FCIB).

The Caribbean bank was shut down after raids in cooperation with Dutch authorities following raids in Holland and Wales. HMRC believes many of the 2,500 UK citizens who also use the bank are involved in carousel fraud.

HMRC released a statement: "HMRC has in place a comprehensive strategy to deal with carousel fraud, and will actively pursue the organised criminals involved and deny them the proceeds of these crimes, wherever the money trails take us anywhere in the world.

"Our investigations in recent months have shown that FCIB has regularly been used by fraudsters and we are confident that the Dutch actions will have a significant disruptive effect on fraud in the UK."

A government source told the Guardian: "We think the carousel fraud industry has been holed below the waterline."

Carousel fraud involves importing, or claiming to import, goods from another EU country without paying VAT, then selling them on and pocketing the tax. The same goods will often go from country to country earning fraudulent tax at every stage. Increasingly, the goods don't even physically move.

Dutch police want to question the bank's founder John Deuss. Deuss admitted to reporters that the bank was under investigation but denied any wrongdoing.

Customs investigators used powers under the Proceeds of Crime Act to track the fraudsters' earnings. But FCIB had problems finding a bank to handle final payments to its UK customers - this forced it to suspend accounts.

HMRC recently got permission from the European Union to change the way VAT on mobile phones and computer chips, most often used for carousel fraud, is collected.

More from The Guardian here.

In other news a BBC investigation has found the total value of VAT-fraud could be up to four times higher than Customs estimates. Panorama used figures from Eurocanet - a European Commission sponsored joint police initiative. It estimates total UK fraud to be as high as €12.2bn. More here. Customs disputes the figures.®

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