Five men who were part of illegal tobacco smuggling rings in the Midlands and Buckinghamshire have been sentenced in a £600,000 tax fraud.
Four gang members were arrested following an HM Revenue and Customs (HMRC) operation in 2012, which tracked their illegal activities across the West Midlands and Milton Keynes. One of the four, along with a fifth man, was then caught reoffending while on bail in 2016.
The men, from Staffordshire, Milton Keynes and Birmingham, were sentenced at Birmingham Crown Court.
HMRC initially identified two gangs active in 2011 and 2012. One, which was based around Milton Keynes, that processed raw tobacco into counterfeit tobacco at a farm in Leighton Buzzard, then packaged the tobacco at a house in Bletchley. The second gang, based around Staffordshire, bought the fake product to distribute and sold it across the West Midlands from a storage unit in Cannock.
HMRC raided the premises used by both gangs in March 2012, arrested the men and dismantled the tobacco factory, seizing tobacco, vehicles and cash.
- Philip Costello, 51, of Rugeley, was jailed for five years and one month for his role with the Staffordshire gang, two years for a similar criminal offence he committed while on bail in Birmingham and 8 months for money laundering. The sentences will run concurrently.
- Trevor Campbell, 51, of Hall Green, was jailed for 12 weeks in prison suspended for 21 months for the 2016 fraud linked to Costello.
- Shaun Jukes, 49, Costello’s criminal partner, also of Rugeley, was jailed for two years suspended for 21 months in April 2016.
- Ernestas Vadeikis 25, of Milton Keynes, who acted as a delivery driver, was jailed for four months, suspended for 21 months, in April 2016.
- Qing Feng Zheng, 38, originally arrested in Milton Keynes, received a four-month suspended jail sentence in March 2016.
Richard Young, Assistant Director, Fraud Investigation Service, HMRC, said:
“These determined criminal gangs operated a network to smuggle, transport, manufacture, store and sell counterfeit tobacco, purely to evade tax. This was a serious attempt on an industrial scale to steal hundreds of thousands of pounds from the public purse and undermine local businesses.
“We urge anyone with information about the trade in smuggled or counterfeit tobacco to contact the Customs Hotline on 0800 59 5000. If you’re ever offered cheap or dodgy-looking cigarettes or tobacco, call us – don’t let the crooks get away with this type of fraud.”
Notes for Editors
1.The men were charged with being knowingly concerned in the fraudulent evasion of Excise Duty under Customs and Excise Management Act 1972.
2.Philip David Costello, dob 15/05/64, of Newman Grove, Rugeley, Staffordshire, pleaded guilty to the evasion of Excise Duty and money laundering offences during his trial on 11 February 2016. He worked in partnership with Jukes, purchasing commercial quantities of tobacco from the Milton Keynes gang for onward distribution across the Midlands and beyond. He was arrested in March 2012 and charged in February 2015. While on bail pending his trial he was caught in Birmingham, with accomplice Trevor Campbell, with another consignment of illegal cigarettes and cash in 2016. He was immediately remanded into custody and time he has served to date was taken into consideration at the sentencing for both frauds. He was sentenced on 13 May 2016. Costello had a history of Excise Duty, VAT and tax evasion offences taken into account.
3.Shaun Trevor Jukes, dob 29/01/67, of Attlee Crescent, Rugeley, Staffordshire, pleaded guilty on 11 February 2016, and on 28 April 2016 was jailed for two years suspended for 21 months, 200 hours unpaid community work and also pay £2,552 court costs. Jukes worked in partnership with Costello orchestrating the purchase of smuggled and counterfeit tobacco from the Milton Keynes gang to sell on across the Midlands.
4.Ernestas Vadeikis, dob 17/10/90, of Ruthven Close, Milton Keynes, Buckinghamshire, pleaded guilty on 12 February 2016 and was jailed for four months, suspended for 21 months, and ordered to do 100 hours unpaid community work on 28 April 2016. He was arrested when a delivery of illegal tobacco was made to Cannock Chase in Staffordshire on 15 March 2012.
5.Qing Feng Zheng, dob 07/08/77, living in the Coventry area, pleaded guilty to the evasion of Excise Duty on 15 February 2016. He was sentenced on 23 March 2016 to four month’s jail suspended for 21 months and ordered to carry out 100 hours unpaid community work. Members of the Milton Keynes gang, including Zheng, manufactured counterfeit hand rolling tobacco from imported raw tobacco leaf at a farm in Leighton Buzzard. They then transported the hand-rolling tobacco (HRT) to a residential address in Bletchley and packaged it for sale across the United Kingdom to other criminals. Three of this gang absconded following their arrest and are still being sought in connection with this tax fraud.
6.Trevor Anthony Campbell, dob 22/09/64, of Woodford Green Road, Hall Green, Birmingham, West Midlands, was arrested with Costello in February 2016 and pleaded guilty to the fraudulent evasion of Excise Duty on 2 March 2016. He was sentenced on 13 May 2016 to 12 weeks in prison, suspended for 21 months, and ordered to carry out 120 hours unpaid community work. He was involved in the evasion of £77,085 Excise Duty and VAT on cigarettes seized in Birmingham in 2016.
7.Seizures associated with these gangs include:
- On 15 March 2012, at a farm in Soulbury, Leighton Buzzard, 615 kilos of HRT with Excise Duty and VAT evaded of £93,418. Approximately 943 kilos of unprocessed, raw tobacco leaf were also seized.
- On 15 March 2012, at the packaging site in Bletchley, 66.3 kilos of HRT were seized with Excise Duty and VAT evaded of £10,070. Also at this site HMRC seized a significant amount of counterfeit packaging wrappers for Golden Virginia, Amber Leaf and Benson & Hedges tobacco brands.
- On 15 March 2012, at Cannock, an account book was found in one of the gang’s vehicles, which showed the amount of tobacco delivered from Milton Keynes to Jukes and Costello between September 2011 and March 2012. The deliveries recorded totalled 3,673.9 kilos of HRT.
- On 12 September 2011 and 16 February 2012, two other smaller seizures of illegal tobacco were made from an individual believed to be a customer of Jukes and Costello.
- Costello was awaiting trial for the above seizures when he was arrested on 2 February 2016 by HMRC officers on Trinity Road, Aston, Birmingham. He and Campbell were sitting in a parked Vauxhall van, loaded with 240,140 illegal Maharba cigarettes. HMRC officers conducted a separate search of a Mercedes car that was under the control of Costello, and found an opened packet of the same brand of cigarettes and approximately £13,000 in cash hidden in the spare wheel cavity of the boot. The total Excise Duty and VAT evasion on these cigarettes is £77,085 with a total Excise Duty and VAT evaded for all the seizures of £558,065.
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Issued by HM Revenue & Customs Press Office
HM Revenue & Customs (HMRC) is the UK’s tax authority.
HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.