Two businessmen have been jailed after stealing almost £145,000 in VAT and laundering money.
Andrew Baddeley, 45, formerly of Greengate Road, Church Lawton, Stoke-on-Trent, and Douglas Brown, 55, of Springfield Avenue, Warrington, both ran IT recycling businesses and used their company accounts to launder money for a 23-man criminal gang.
An HM Revenue and Customs (HMRC) investigation found they moved £420,774 of criminal cash through their accounts along with Andrew Baddeley’s father Peter, 71, of Sandpiper Close, Farnworth, Bolton.
According to HMRC, the duo also claimed to repair computer monitors before selling them to customers in Africa. But HMRC found it was all a scam to steal VAT repayments with each stage of the transaction chain backed up with fake documents.
Brown and Baddeley claimed to have spent more than £1 million on computer monitors from two IT recycling companies before re-selling the goods to companies in Africa. The pair then reclaimed the VAT they supposedly paid on the recycled goods.
But checks with the companies and shipping agents revealed the purchases were fake and the men had created a string of “phoney paperwork,” HMRC said. Investigations also revealed they used their bank accounts to launder money for a criminal gang who set up fake businesses to steal VAT. Twenty three members of the gang were jailed in 2016.
HMRC said: “Brown ran Recycle Technology Ltd on Hoyle Street, Warrington, and claimed £99,787 in fraudulent VAT repayments between April 2012 and June 2013 with £94,156 being paid while the rest was withheld by HMRC. He also laundered £10,955 criminal money through his business in 2010.
“Andrew Baddeley ran CMS Computer Monitor Services Ltd on Ashtenne Business Park, Radway Green, Crewe, and claimed £94,746 in fraudulent VAT repayments between April 2011 and May 2013 with £49,403 being paid while the rest was held by HMRC. He was also involved in laundering £409,819 criminal money through the company between October 2009 and August 2011.”
“His father, Peter Baddeley, ran the business until December 2010 and was convicted of money laundering between October 2009 and May 2011.”
The men were sentenced at Leeds Crown Court on 23 April 2018 by His Honour Judge Neil Clark:
- Andrew Baddeley admitted VAT fraud and money laundering on 9 December 2016 and was sentenced to four-and-a-half years in prison, and was banned from being a company director for six years.
- Douglas Brown was convicted of VAT fraud and money laundering on 11 April 2018 and was sentenced to four-years and one-month in prison, and was banned from being a company director for six years.
- Peter Baddeley was convicted of money laundering on 11 April 2018 and was sentenced to two-and-a-half years in prison, and was banned from being a company director for three years.
The gang was based in the West Midlands, Nottinghamshire and West Yorkshire. It used 20 fake companies to make over 80 fraudulent VAT repayment claims totalling £2.6 million in a “highly sophisticated fraud,” HMRC explained.
They were jailed for more than 54 years in 2016 in total after a four-year investigation by HMRC. Proceedings to recover the stolen VAT and criminal proceeds are underway.