The Case of the Carousel Fraud

The Case of the Carousel FraudPrior to our instruction as forensic accountants, our client had been found guilty of a classic ‘Carousel Fraud’ or ‘Missing Trader Fraud’.

This fraud involved the setting up of parallel fraudulent companies where the same goods were in effect being passed round between them all, rather like a carousel and input VAT being reclaimed each time, but with output VAT never being paid over. Thus, our client had been found guilty of perpetrating a fraud on HM Revenue & Customs. In summary, the company for which he worked had claimed back large amounts of VAT to which it had not been entitled.

Our client had worked as a senior member of staff for one of these missing trader companies and had been found guilty. We were instructed when The Crown were trying to recover £15 million from him, based on the amount of VAT evaded by his company.

In our forensic accounting investgation we carried out a full tracing of his income and net assets over a 6 year period and were able to demonstrate that many of the financial allegations, including other income tax irregularities, which had been made by the Crown, were in fact unfounded.

We prepared our forensic accounting report and showed the extent of these errors. We subsequently attended at Court and advised on the settlement with the CPS, which resulted in our client only having to pay over the sum of £300,000, over a reasonable period of time.

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