A gang of five men, who met at roadside cafes and used free public Wi-Fi to try and hide their £10 million cigarette smuggling ring, have been jailed for 16-and-a-half years.
The men, from across the North West and Yorkshire attempted to import three large freight consignments of illegal cigarettes from Europe and China, describing them as mattresses and automotive parts on Customs paperwork to try to evade detection.
HM Revenue and Customs (HMRC), working with Border Force, investigated the gang, tracking their illegal activities, suspicious travel abroad and meetings in service stations, roadside cafes and pubs.
Ringleader Raymond Hughes, 57, of Aughton, Lancashire, held regular ‘business meetings’ in a roadside cafe and other locations that offered free Wi-Fi in a bid to avoid being caught.
HMRC even found a text message between the fraudsters claiming “nothing can be traced” because they used public Wi-Fi to communicate and track their illegal imports.
The gang used the internet to create fake businesses, aliases and contact shipping companies to give the impression of trading in other goods. Despite using free Wi-Fi and disposable mobile phones, HMRC traced many of the fake emails and false identities to the men’s home IP addresses and personal mobiles.
Tony Capon, Assistant Director, Fraud Investigation Service, HMRC, said:
“Hughes lived in an expensive house, drove a Porsche Cayenne and travelled the world, but he never declared any legitimate income or business trading to HMRC. He operated a criminal network to smuggle, transport, store and sell illegal cigarettes and tobacco, purely to evade tax. This was a serious attempt on an industrial scale to steal millions of pounds from the public purse and undermine local businesses.
“In our work to create a level playing field for all businesses and taxpayers, we urge anyone with information about the trade in smuggled or counterfeit tobacco to contact our 24-hour 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.”
Hughes was directly linked to the container-loads of illegal cigarettes seized at UK border points and inland. He travelled extensively abroad to source the illegal cigarettes from criminal suppliers.
He claimed to be the boss of Ray Sport Ventures, a company based in Singapore that imported teddy bears, razorblades and computer parts from China. HMRC investigators found Hughes had not declared any income for several years despite an affluent lifestyle and regular worldwide travel.
The other jailed gang members were:
- Marc Feldman, of Leeds, who liaised with shipping agents over deliveries and payments. He travelled to Hartshead Moor Services on the M62 for a gang meeting and had previously been convicted of large-scale Excise Duty evasion, involving 1.5 million cigarettes in 2010.
- Michael McNally and John Wignal, both of Liverpool, were involved in distributing the cigarettes once they cleared UK Customs controls. The pair met other gang members on several occasions including at The Greyhound public house just off the A580 near Leigh, Lancashire, and were overheard discussing the deliveries.
- Stephen Sheard, of Crewe, acted as a shipping agent and a go-between with haulage companies and storage facilities during the Customs clearance for two of the consignments containing 18 million smuggled cigarettes from Singapore. Using his company More4U, he sent fake business emails to clearing agents that described the cigarettes as automotive parts destined for Liverpool on behalf of a company in Oxford. HMRC seized fake paperwork from his house and traced extensive emails, phone calls and text messages between Sheard and other gang members.
A sixth man, Adrian Davidson, of Leeds, was spared jailed after he admitted his part in the smuggling ring. He used an alias at a bank in Yeadon to transfer money to pay to shipping agents for the smuggled containers. HMRC found £17,000 in cash hidden under his floorboards along with paperwork for visas and travel abroad for Hughes and others. Mobile phone evidence also connected him to Feldman.
The amount of Excise Duty evaded in this case is estimated at £10,199,650. HMRC have started confiscation proceedings to recover the stolen tax from gang members under Proceed of Crime legislation.
Notes for Editors
1.The men were charged with being knowingly concerned in the fraudulent evasion of Excise Duty under the Customs and Excise Management Act 1972.
2.Raymond Hughes, dob 24/7/59, of Elmsfield Park, Aughton, Lancashire, pleaded guilty to the evasion of Excise Duty on 19 September 2016, the first day of his trial. He was jailed for six years for his involvement in the cigarette smuggling ring and six years for his role in a second tobacco smuggling gang. Both sentences to run concurrently. Contact HMRC Press Office for details of the smuggled tobacco seizures associated with Hughes second jail sentence issued on Friday 9 December 2016.
3.Marc Feldman, dob 20/12/61, of Parc Mount Avenue, Leeds, West Yorkshire, was found guilty at trial on 5 October 2016, and was sentenced to 30 months jail on 21 October 2016.
4.Michael McNally, dob 20/3/67, of of Mapledale Road, Liverpool, was found guilty at trial on 5 October 2016, and was sentenced to 30 months jail on 21 October 2016.
5.John Wignal, dob 30/5/59, of of Blackmoor Drive, Liverpool, was found guilty at trial on 5 October 2016, and was sentenced to 30 months jail on 21 October 2016.
6.Stephen Sheard, dob 6/12/63, of Minshull New Road, Crewe, Cheshire, was found guilty at trial on 5 October 2016 of two charges, and was sentenced to three years jail per charge to run concurrently on 21 October 2016.
7.Adrian Davidson, dob 26/9/51, of Crow Trees Park, Rawdon Leeds, entered a guilty plea and was sentenced to 30 months imprisonment suspended for two years at Manchester Crown Court on the 4 November 2015.
8.The three importations associated with this gang include:
- Nine million cigarettes imported into the UK via Southampton from Singapore in May 2012 described as brake discs on fake Customs paperwork delivered to Liverpool.
- Nine million Aroma and Vess brand cigarettes imported into the UK via Southampton from Singapore in July 2012 described as automotive brake parts on fake Customs paperwork - neither brand is legally available in the UK. This consignment was intercepted and seized.
- Nine million Lambert & Butler brand cigarettes seized on 22 November 2012, in a container which was manifested as mattresses from China at Felixstowe Port. According to paperwork the container was destined to a company based in Batley, West Yorkshire. Most of the gang had been involved in meetings and texting in relation to this shipment. This consignment was intercepted and seized.
9.Follow HMRC Press Office on Twitter @HMRCpressoffice
10.HMRC's Flickr channel: www.flickr.com/hmrcgovuk
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.