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News - 13 March 2013

Wine smugglers sentenced in £5m wine fraud

Two men (Roberto Parma and Alberto Mori) found guilty of smuggling illicit Italian wine into the UK have been jailed for excise duty and VAT evasion after an investigation by HMRC.

A London wine merchant company, I Nobili UK Ltd, owned by Mori imported wine from an Italian-based company, Cantine Soldo spa, using the UK’s duty suspension scheme. Parma and Mori exploited this scheme by using the same delivery documents many times and avoiding paying duty by diverting the wine from the bonded warehouse, when duty would normally be paid.

HMRC investigators found that Parma’s company provided cover for the fraud. It used Skype messaging to orchestrate the movement of wine from Italian warehouses and gave code words to drivers to use when picking up the loads, to avoid paperwork landing in official hands.

David Margree, Assistant Director of Criminal investigation, HMRC, said:
“HMRC will not stand by while criminals try to cheat the system. The message is clear - HMRC will find you, and you will go to court.”

A further indication of the fraud was revealed to HMRC investigators when stock levels at the UK bonded warehouse showed that wine was being stored for unusually long periods of time.

Parma and Mori skipped bail and returned to Italy, but were tracked down by Italian Police and extradited to the UK in 2012 to stand trial. During the arrest more than £58,000 of cash was seized.

Confiscation proceedings are underway.

Stuart Coleman, Money Laundering and Fraud Reporting Officer at ABDS comments:
“The movement of duty suspended alcohol is controlled by HMRC and foreign customs authorities. Alcohol can be stored and moved between bonded warehouses within the EU without the payment of excise duties. Once the business needs to release the alcohol to retail outlets, the excise duty becomes payable at the rates applicable in the host country. Therefore UK duty was due as soon as the alcohol was diverted from the UK bonded warehouse to the UK market.

If you need any help and advice for your business on Corporation Tax or VAT contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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