Text messages reveal £270k ‘pyramid’ VAT fraud
A gang that masterminded a pyramid-style £270,000 VAT fraud uncovered through members’ incriminating text messages has been sentenced.
Junior Matthew-Ekuku from Deptford was the ringleader of the enterprise that obtained £117,000 by producing false VAT returns for businesses that never traded. Attempts to claim a further £150,000 in fake VAT repayments failed. Oseatofah Hilary Ineomo, of Brixton, acted as second-in-command and was assisted by Londoner Adetomiwa Ajao, who helped recruit businesses to the illegal venture.
Text messages saying “recruit, recruit recruit as many mans as you can – the more businesses we have, the more money we will make” were found by HM Revenue and Customs (HMRC) investigators during analysis of the gang members’ phones after they were arrested. Texts advising how to deal with HMRC were also discovered.
David Margree, Assistant Director, Criminal Investigation, HMRC, said:
“Without HMRC’s intervention, it is likely that more and more fake businesses would have been created to become involved in this fraud, allowing Matthew-Ekuku and his gang to reap more illegal profits at the expense of honest taxpayers.
“HMRC has issued civil assessments against the directors of 30 businesses that became involved in the fraud.”
Kingston Crown Court heard that Matthew-Ekuku and Michael Taiwo were first to be arrested in 2011. HMRC officers had become suspicious about invoices presented to support a VAT repayment claim for Taiwo’s business. Analysis of Matthew-Ekuku’s computer revealed a spreadsheet which listed VAT return details and contacts at 30 businesses which were registered as companies but had never actually traded.
Matthew-Ekuku, who lived in a luxury apartment in Stanmore, Middlesex, pretended to represent these companies by dealing with HMRC on their behalf and supplying fake purchase invoices to legitimise the VAT claims.
The companies paid the VAT refunds to Matthew-Ekuku in a manner similar to a pyramid scheme and, when questioned, many claimed that they became involved after gang members had offered them the chance to open a car dealership which would eventually provide them with funds through a legitimate “tax-saving loophole”.
Junior Matthew-Ekuku pleaded guilty to cheating the public revenue at a hearing in September 2012.
The other five gang members denied their involvement in VAT fraud but were found guilty after a trial. They returned to Kingston Crown Court for sentencing on Friday (21 June 2013).