Business, Freight News, Logistics, Road

Gang jailed for £50m diversion fraud

[ February 13, 2012   //   ]

An Essex gang has been jailed for one of the UK’s biggest ever alcohol diversion frauds. Kevin Burrage, owner of Promptstock, a bonded warehouse in Essex managed by his brother-in-law, Gary Clark, Michael Turner and Davinder Singh Dhaliwal conspired to defraud the UK exchequer of £50m in unpaid duty and VAT, which they used to fund a lifestyle of luxury homes and expensive cars.  Confiscation proceedings are underway.

The gang bought household branded beer, wine and spirits from bonded warehouses in France and imported it duty free into the UK, destined for Promptstock, which was then illegally diverted to locations around the UK where it was sold on without duty being added. For example, a vehicle loaded with vodka arrived in the UK for delivery to the Promptstock bonded warehouse but was diverted to an industrial unit in Hayes, Middlesex, for distribution in the UK, without the duty being paid. Dhaliwal was observed supervising the offloading of the vodka into the unit. The goods were seized by HMRC officers.

The gang also reversed the fraud by appearing to send trucks to France loaded with non duty paid alcohol. The alcohol actually remained in the UK and was sold on, again with no tax added. To avoid detection, the gang sent empty trucks to the continent, several of which were intercepted by UK Borders Agency officers.

For instance, an empty trailer was sent to France but the beer was found by HMRC officers at premises in Leicester complete with orange rotation stickers stuck on at Promptstock’s premises.

Accomplice Michael Turner owned Keytrades (Europe) which provided a seemingly legitimate cover for movements of the alcohol consignments while Davinder Singh Dhaliwal organised the delivery of large quantities of alcohol ready for distribution. Following a covert surveillance operation, the gang was arrested in a series of dawn raids by HMRC officers in November 2008.

One of the haulage companies involved in the fraud, Stag Freight, was owned by John Byrne, and run by Terry Ward the transport manager. They were convicted of cheating the Public Revenue and jailed for seven years each in August 2011.