More Carbon Fraud Arrests:

Felipe — Tue, 25 May 2010 07:05:20 +0000

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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The UK's Largest Energy Blog - Catalyst-Commercial.co.uk » More Carbon Fraud Arrests:

More Carbon Fraud Arrests:

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