Four More Arrests Linked to Fraudulent Carbon Trading Scheme

Four more fraudsters were arrested in the early hours of Thursday morning suspected of carbon trading frauds. HM Revenue & Customs (HMRC) investigators found guns and piles of cash in 7 properties in London and Leicester areas.

The agency confirmed these raids were linked to nine arrests last August in London and Gravessend in Kent.

“All those arrested today and last August are believed to be part of an organised crime group, operating a network of companies trading large volumes of high-value carbon credits.” HMRC said

Chris Martin, an Assistant Director at the HMRC added:

“These arrests are the result of the hard work that our Investigators have carried out during a sustained and complex 15 month operation,”

The fraudsters arrested were committing a well know type of fraud know as “carousel fraud” or “missing trader” fraud which can be committed on any goods such as mobile phones and computer chips imported VAT-free from EU members states. Carbon allowances are particularly susceptible because they are high value intangible and easily traded between different countries.

Back in July 2009 the Treasury removed VAT from carbon credits to try and avoid such frauds on carbon trading, but this is only a short-measure while we wait for an EU common carbon trading policy to tackle fraudsters.

In late April, we reported that UK and German tax officers teamed up in a major cross-border investigation into alleged carbon trading fraud involving fraudsters from Britain, France, Spain, Denmark and Holland which resulted in 22 UK arrests.

Europol, the cross-border police force estimated that criminals mainly from Britain, France, Spain and Holland have pocketed a total of €5bn (£4.5bn) in this fraudulent carbon trading scheme which is variation of the well known “carousel fraud”.

Companies now need permits to emit carbon dioxide as part of the global fight against climate change and polluters are granted a certain number of emissions allowances that can be traded.

“The Government took decisive action to prevent this type of fraud recurring by zero rating carbon credits for VAT,” said Les Beaumont, Deputy Director of Criminal Investigation for HMRC.

Have your say. What measures should be taken to prevent fraudsters from gaming the taxman when trading carbon allowances across European countries?

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1. More arrests in this carbon scam…

   I still cant get my head around this, this is going to be a major problem in the future. As we will al need to start trading our own carbon footprint at some point….

   Trackback by pligg.com — May 25, 2010 @ 7:41 am

2. The carbon scam continues…

   Carbon fraud is a joke, they are basically taxing fresh air, and then these guys are scamming the vat part of it, to make even more money….

   Trackback by social.weehz.com — May 25, 2010 @ 7:41 am

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6. More arrests in this carbon scam…

   I dont get how you can tax fresh air in the first place, then you have to pay VAT on top? fair play to these guys for trying anyway….

   Trackback by pligg.com — May 26, 2010 @ 8:09 pm

7. The carbon scam continues…

   I dont get how you can tax fresh air in the first place, then you have to pay VAT on top? fair play to these guys for trying anyway….

   Trackback by pligg.com — May 26, 2010 @ 10:51 pm

8. More carbon fraud going on…

   Carbon fraud is a joke, they are basically taxing fresh air, and then these guys are scamming the vat part of it, to make even more money….

   Trackback by pligg.com — May 26, 2010 @ 10:52 pm

9. Carbon fraud scam in place…

   I still cant get my head around this, this is going to be a major problem in the future. As we will al need to start trading our own carbon footprint at some point….

   Trackback by socialwebcms.com — May 27, 2010 @ 2:00 am

10. More arrests in this carbon scam…

    This is big news, from a vat fraud point of view, a few years ago this was big business in the mobile phone game, claiming vat on empty boxes….

    Trackback by pligg.com — May 28, 2010 @ 12:53 pm

11. The carbon scam continues…

    Why dont they just remove the VAT part, then this would stop any frauds going on, tbey are already taxing fresh air, so why should they make vat on top….

    Trackback by smash-up.com — June 1, 2010 @ 4:16 am

12. Carbon fraud, nothing less, nothing more…

    I dont get how you can tax fresh air in the first place, then you have to pay VAT on top? fair play to these guys for trying anyway….

    Trackback by pligg.com — June 9, 2010 @ 4:56 pm

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