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Time’s up for luxury watch fraudster

Press release   •   Sep 30, 2016 14:51 BST

A luxury watch dealer, who dodged £1.25 million in tax by falsifying import paperwork to show Rolexes, Cartiers and Breitlings were worth as little as $50, has been jailed for three years.

Darren Reay, 46, of Grimoldby, Lincolnshire,admitted misdescribing the watches as low-value ‘precision instruments’ – enabling him to pay import VAT of just £7,805 during a four-year fraud uncovered by HM Revenue and Customs (HMRC).

Reay, who traded online via eBay as Darren Reay Watches and also from Wight’s Watches in Cowes, Isle of Wight, used the money to fund a lavish lifestyle of luxury properties, cars and designer watches.

Colin Spinks, Assistant Director, Fraud Investigation Service, HMRC, said:

“Reay blatantly lied to steal £1.25m from the UK public. His crimes were driven by pure greed to fund a luxury lifestyle he couldn’t afford. We will ensure honest, hardworking businesses do not suffer from being undercut by fraudsters like Reay.

“HMRC will continue to pursue those criminals who attack the tax system. We ask anyone with information about suspected VAT fraud to contact our 24-hour Hotline on 0800 59 5000 and help us stamp it out.”

The investigation began after business records, including diaries, invoices, and shipping and courier documents, were examined as part of an HMRC compliance visit to Wight’s Watches in March 2014.

Documents showed insurance of $25,000 was taken out on shipments with declared import values of between $50 and $100.

HMRC investigations revealed that over 520 packages had been imported from one retailer in New Jersey, United States, with £6.3 million being paid out by money transfer in the same period.

Reay told investigators these watches were imported to order and he would receive commission. The offences took place between March 2011 and March 2015.

Darren Reay left the Isle of Wight in June 2014, but continued trading online through a business registered in Barnet, Greater London, while living in Houghton-le-Spring, County Durham.

On 29 September 2016, at Teesside Crown Court, Darren Reay admitted the fraudulent evasion of VAT totalling £1,252,948.20 and was jailed for three years.

Over 800 watches were seized during a search of Reay’s then-home in Chilton Moor, Houghton-le-Spring, in March 2015. His Honour Judge Armstrong ordered that the watches be sold and the proceeds paid to HMRC.

Notes for editors

  1. Darren Reay (DOB 01/01/70) of Tinkle Street, Grimoldby, Lincolnshire, formerly of Morley Terrace, Houghton-le-Spring, Tyne and Wear.
  2. Reay is a former Company Director of IOW Sales Ltd, trading as Wight’s Watches, of High Street, Cowes, Isle of Wight (until May 2014). From March 2014 his online business was registered to an office address in High Street, Barnet, Greater London.
  3. Reay was jailed for three years on 29 September 2016.
  4. Darren Reay was arrested in Chilton Moor, near Houghton-le-Spring, County Durham, by HMRC officers on 19 March 2015. He was charged at Newton Aycliffe Magistrates’ Court on 2 September 2016 with the fraudulent evasion of Value Added Tax, by failing to account for the correct amount of Value Added Tax payable on watches imported into the United Kingdom during the course of a trade, profession or vocation, namely buying and selling watches, contrary to the Value Added Tax Act 1994. He gave his then-Houghton-le-Spring address when charged.
  5. Reay also had business links to Gibraltar where he is known to have traded online as watches.es through his business KJO Ltd. He also traded online from the UK as Watch Dealer Ltd between March 2011 and August 2013.
  6. Businesses with similar names were not part of our investigation.
  7. Goods imported into the UK from outside the EU are subject to customs duty and VAT at a rate dependant on the type of goods, country of export and value. Customs duty was not due on the watches, but import VAT of 20 per cent should have been paid.
  8. Anyone with information about people or businesses possibly involved in VAT fraud can contact us on 0800 59 5000 or online at https://www.gov.uk/report-vat-fraud
  9. Follow HMRC’s Press Office on Twitter @HMRCpressoffice.

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.

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