Carousel fraud "holed below the waterline" by bank bust

News Article - 21 September 2006
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Customs officials say that they have struck a decisive blow against carousel fraudsters after discovering many of the criminals involved use the same Caribbean bank.

Carousel, or trader-not-present fraud, is estimated to cost the UK £5 billion by charging and reclaiming VAT on fraudulent "transactions", made between fictitious companies.

The First Curacao International Bank was raided in a joint Dutch-British operation after it was discovered that all the criminals convicted of the offence since 2004 used the bank.

"We think the carousel fraud industry has been holed below the waterline," a government spokesperson told the Guardian.

Investigators suspect that another 2,500 UK residents with accounts at the bank are involved in the trade.

The bank has now been placed in a form of administration to protect innocent customers, although there is no suggestion that it was complicit in any wrongdoing.

Across the EU the fraud is estimated to be worth €50 billion a year.

Investigators recently discovered a consignment of mobile phones that had spent the last five years crossing and re-crossing the Swiss/German border, claiming €165 million in German VAT.

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