Page last updated at 06:29 GMT, Saturday, 4 October 2008 07:29 UK

Fraudster's 'pop star' lifestyle

By Phil Kemp
The Donal MacIntyre programme, BBC 5 live

A fraudster who has been jailed for more than 12 years led a 'pop star' lifestyle, complete with helicopters, fast cars and race horses bought from the proceeds of a multi-million pound VAT scam.

VAT fraudster Craig Johnson
Craig Johnson played a leading role in the sophisticated fraud.

Craig Johnson, 35, from Stone in Staffordshire, laundered more than 6m through a complex tax fraud involving the apparent importation and exportation of mobile telephones between several EU states.

So-called 'missing trader' or 'carousel' fraud is estimated to cost European taxpayers up to 170bn a year - twice the European Union's annual budget.

Johnson is one of 21 people to be jailed in connection with a 138m VAT fraud following an investigation by HM Revenue and Customs (HMRC).

Stately home

"The grass was never long. It was always cut short," said Alan Tune, describing the Grade II listed Meaford Hall, which is next door to his house in Staffordshire.

Meaford Hall in Stone, Staffordshire is one of the two properties seized

The beautifully-kept stately home, which is situated in 22 acres of grounds, was the birthplace of the Napoleonic War hero Admiral John Jervis.

Meaford Hall, valued by HMRC at between 2.5m and 3m, is perhaps the most vivid indication of its most recent owner Craig Johnson's ill-gotten wealth.

"It was nice to see the automatic gates opening and see Bentleys coming out of there and Ferraris. Top of the range cars you'd die for," Mr Tune told 5 live's Donal MacIntyre programme.

"It was like living next-door to pop stars really."

'Fiction'

Meaford Hall, which will soon to be put up for sale by the tax authorities, was just one of a millionaire's wish-list of assets seized by authorities after the six year fraud investigation.

Other assets seized in the operation include a yacht, Rolex watches, diamonds, luxury cars and two helicopters.

He was multi-rich but unfortunately, it wasn't his money he was multi-rich with
Neighbour Alan Tune
Craig Johnson was at the centre of a scam in which businesses illegally claimed back VAT on imported mobile phones - taxes which they had never paid.

"They construct a fiction of paper movements, and [actual] movements of high value goods such as mobile phones and computer chips," said Euan Stewart, director of operations for HMRC's Criminal Investigations Inspectorate.

"The invoicing relates to hard cash and large amounts of VAT, and at some point in the carousel, somebody goes missing with the money.

"We have to put the carousel of paperwork and phones together with the money and how the money moves," he added.

Secretive

Craig Johnson's role within the gang was to launder the proceeds of the 'carousel' fraud by buying property, race horses and sports cars.

HOW TO LISTEN...
The Donal MacIntyre programme is on Radio 5 Live on Sunday, 5 October at 1900 BST.

The funds to pay for them came from bank accounts opened in Hong Kong.

Alan Tune said Johnson was very secretive about the source of his income even to his neighbours.

"He never mentioned anything at all. We just knew he was a really wealthy person before he came here," he told 5 live.

"That showed because there were helicopters coming in. He was having helicopter lessons and he was often coming over flying those. It was lovely to see."

As well as the landing pad for his two helicopters, Johnson's eight-bedroom mansion also housed a swimming pool and a spa with a gym.

"He was multi-rich but unfortunately, it wasn't his money he was multi-rich with," his neighbour added.

Euan Stewart from HMRC said "We believe, and I think the court has been convinced, that he is a major principal in the organised crime groups that sit behind this fraud."

Shared proceeds

Johnson was not alone in living the high-life from the proceeds of crime.

His associate, Clive Saunders was also jailed for 11 years for his part in the VAT fraud, which funded the building of another million pound Staffordshire mansion, more sports cars and a helicopter.

He used his contacts in the security business to recruit 'front men' for so-called 'missing trader' companies involved in the scam.

These companies would buy the imported mobile phones at discounted rates plus VAT, which they then claimed back before disappearing.

The proceeds were then shared amongst all the fraudsters involved along the chain.

Craig Johnson's neighbours think whoever is lucky enough to buy the house that tax-payers' money paid for will need a lot of money for its upkeep.

"If you look at the hall now and the grounds to it, I think probably a pop star or something like that'll move in because it's absolutely fabulous," said Alan Tune.

"I don't think I've seen any place so nice as it to be quite honest, both inside and out."

The Donal MacIntyre programme will be broadcast on BBC Radio 5 live at 7pm on Sunday 5 October, 2008 or download the programme podcast.


SEE ALSO
VAT fraudster told to repay 3.6m
05 Sep 08 |  Merseyside
Four jailed over 1.8m VAT fraud
04 Jun 08 |  West Midlands
New arrest in VAT fraud inquiry
04 Apr 08 |  England
The fight against tax evasion
03 Apr 08 |  Business
New rules to stop carousel fraud
01 Jun 07 |  Business

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