Eastern European Women Used in Multi-Million Pound Tax Scam

January 28, 2011 International Tax CooperationTaxation in UK

HM Revenue & CustomsA key member of a London based gang has been jailed for recruiting Eastern European women to cheat the HM Revenue and Customs out of GBP 3.3 million.

Ricardas Virokaitis, a 37 year old Lithuanian national residing in London, was jailed on January 26th for five years, after pleading guilty to conspiracy to cheat the public revenue to an amount of GBP 3.3 million.

The case prosecutor alleged that Ricardas Virokaitis and his gang recruited women from across Eastern Europe to travel to the UK and falsely register for tax credits and social benefits under fake identities. The women would be sent back to their home countries, while their payments would continue to be deposited into bank accounts accessible by Ricardas Virokaitis and his associates. It was alleged that through the scheme, Ricardas Virokaitis was able to withdraw GBP 90 000 per month from the various bank accounts.

Ricardas Virokaitis is accused of having recruited over 100 women for the operation. The prosecutor stated that the women with children were preferred, as they could expect much higher tax credits and benefit payouts. Ricardas Virokaitis or his some of his close associates are alleged to have escorted all the women to the appropriate government agencies, in order to support their identities and prevent any escape.

UK police arrested Ricardas Virokaitis in Stansted airport, as he was attempting to board a flight to Lithuania, authorities suspect that he was trying to urgently flee the country. After his arrest, the HM Revenue and Customs (HMRC) inspected the house used by Ricardas Virokaitis and his gang, and uncovered 93 sets of bank cards and accompanying false identity documents.

Ricardas Virokaitis’s arrest follows an extensive international investigation by the HMRC, which began as a nation-wide crack down on large scale benefit fraud. Assistant Director of Criminal Investigation for HMRC Simon Grunwell commented on the case, saying “Criminal gangs such as this are a menace who steal from honest taxpayers. HMRC is cracking down on fraud in the benefits system and the Government has made a further £900 million available to us for tackling evasion, avoidance and attacks by criminal gangs.”

Further investigations are being carried out regarding the involvement of other members of Ricardas Virokaitis’s gang. Confiscation proceedings have also been initiated and are ongoing.

Photo by jam_90s