Last month, it was reported by the Insolvency Service that Mark Cook (‘Mr Cook) ,a Director of Crouch Commodities Ltd (‘Crouch Commodities’), had been disqualified from acting as a director of any company for a period of fifteen years.
This penalty arose from the fraudulent evasion of VAT by Crouch Commodities.
Timothy Thompson of Kangs Solicitors briefly examines the case.
The Insolvency Service | Director Disqualification Proceedings | Kangs Solicitors
The Insolvency Service exercises its enforcement powers to investigate any company which defrauds the public purse and creditors generally and to disqualify any director(s) found to be culpable.
Crouch Commodities | Kangs VAT Fraud Team
Crouch Commodities, through Mr Cook, had been involved in Missing Trader Fraud, otherwise known as a Carousel Fraud, in circumstances where Mr Cook either ‘knew or should have known about’ the fraud that was being perpetrated.
The Public Interest Unit of the Insolvency Service uncovered the fact that Mr Cook, through Crouch Commodities, had illegally claimed VAT repayments amounting to approximately nineteen million pounds from the Revenue.
Crouch Commodities traded in wholesale mobile phones, a market known to be rife with VAT fraud and, even if Mr Cook was not aware of this, he ought to have been.
There is a legal requirement to conduct due diligence by processing one or more of a series of checks designed to indicate whether or not a fraud is being perpetrated.
However, ‘the ultimate question is not whether the ‘trader’ exercised due diligence but rather whether he should have known that the only reasonable explanation for the circumstances in which his transaction took place was that it was connected to fraudulent evasion of VAT’.
It should have been clear to Mr Cook that hallmarks of VAT fraud were evident.
Accordingly, the failure to take adequate precautionary steps to reduce risks of involvement in transactions connected with VAT fraud, resulted in the Company submitting fraudulent VAT returns resulting in significant loss to HM Revenue & Customs.
As stated above, Mr Cook was disqualified from acting as a director of any company for fifteen years.
VAT Fraud | Insolvency | Kangs Insolvency Team
Kangs team of Insolvency Solicitors can provide you with the necessary advice and guidance in relation to all aspects of fraud and insolvency problems.
Who Can I Contact For Help? | Kangs Solicitors
You can rest assured in the knowledge that our lawyers can protect you in proceedings that have a tendency to cross-over from civil to criminal proceedings.
Please feel free to contact any of the below lawyers who will be happy to provide you with some initial advice and an informal chat about any of the issues in this article which may be of interest to you.