Monday, July 14, 2014

Honest Road Haulage Operators Lost Freight Contracts Due to Million Pound Fuel Scam

Seven Year Sentence for Gang Boss Who Swindled HMRC with Complex Red Diesel Offences
Shipping News Feature

UK – Anyone familiar with the British road haulage sector will be aware that there is a certain underground, criminal element who view crimes such as tampering with tachograph operations or using illegal fuel as simply a business advantage to be gained, shipping freight more cheaply than competitors and justifying it to themselves as ‘part of the game’. One such seems to have been Michael Wilmot who with a bunch of others emanating from the Market Rasen area of Lincolnshire were sentenced this week for a crime diabolical in its complexity and aimed at defrauding HM Revenue and cheating honest hauliers of their living.

At York Crown Court Wilmot, 72, was sentenced to seven years in prison for crimes which it estimated cost the revenue alone millions of pounds in duty and tax evasion. The scam involved Wilmot’s connections to an agricultural, or red, diesel purchasing ring, common in rural areas such as Lincolnshire. It seems that at least part of the operation didn’t even bother to ‘clean’ the fuel using deep filtration and bleaching to disguise it, at least to a casual observer, as legal fuel.

The complexities show the lengths villains will go to when perpetrating such acts, the investigation revealed a ‘factory’ making false fuel tanks to hold the illicit fuel whilst the main lorry tanks were carrying legal diesel in case of inspection. Documents for dozens of companies also came to light with directors listed ranging from the fictitious to the deceased. When any sign of investigation arose during the six years the scam operated the company would simply switch its business to another name.

Wilmot sold the fuel, bought from his cousin farmer Charles Trafford, on to thirty five companies which were able to secure lucrative haulage contracts because of the low prices they were able to quote for the work. He was assisted by Tracie Morton, who received a four-and-a-half year jail term for conspiracy to evade payment and cheat the Revenue, and the two conspired to not only avoid the duty liability on around 1.5 million litres of fuel but had the temerity to charge about £3.5 million in VAT, none of which found its way to the Treasury.

The plot came to light when an HGV driver and former Market Rasen town councillor, David Strachan, was stopped in a vehicle using red diesel and found to have a key to the ‘tank factory’. He received a two-year sentence for his part in the operation whilst driver Michael Taylor was jailed for four years for conspiracy to evade payment and cheat the Revenue and John Raithby, a company director received 18 months for evasion of VAT after lodging a guilty plea.

Charles Trafford, along with Marion Tompkins, who was accused of assisting Morton with the administration of the schemes, were both found not guilty of conspiracy to evade payment and conspiracy to cheat the Revenue. The investigation, initially by local police and latterly involving VOSA and HMRC, began in 2011 when the trucks with false tanks were discovered in routine checks and Lincolnshire PC Rachel Hughes commented:

“These are crimes that have affected countless victims because the offenders were lining their pockets with British taxpayers’ money. Not only has it had a huge impact on the economy but it has affected people locally because they have felt very let down. Michael Wilmot, in particular, who was very much the ringleader in this scam, has shown little or no remorse after he was charged and when he appeared in court.

“The sentence that has been handed to him rightfully shows how heinous his crimes were, as they were of all those involved. This case has taken over three years to get to trial because it has been such an extensive and complex investigation. What began as stopping lorries running on red fuel has grown into a multi-million pound tax evasion case.

“I am pleased it has culminated in convictions and subsequent prison sentences. We hope this serves as a stark warning to any other individuals carrying out any similar crimes, or thinking of carrying them out, and shows that Lincolnshire Police is committed to tackling serious fraud.”

Photo: Michael Wilmot faces his fate.