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Ex-policeman collared in UK’s largest ever VAT fraud

Government Communications (NDS)

11 November 2011

He and five others were caught by investigators from HM Revenue & Customs (HMRC) after they claimed their new business, Ideas 2 Go Ltd, had sold more than six million mobile phones and had a turnover of more than £2.4 billion in just eight months. Using details from hijacked or fictitious companies the gang produced thousands of invoices for sales of mobile phones and computer software, producing billions of pounds in fabricated turnover, which generated around £330 million in fraudulent VAT repayments. Cranswick and his gang invented over 6,000 fake business transactions in an attempt to make the repayments appear legitimate. Ringleader Nigel Cranswick, 47, from Dinnington in South Yorkshire went from ‘rags to riches’ in a matter of weeks. Heavily in debt and only weeks into his new business venture, he quit his job as a serving policeman and began splashing out on extravagant purchases. He made lavish improvements to his home, rented a luxury apartment in the Spanish town of Marbella and paid for private schooling and tennis lessons for his children. Cranswick claimed that in the first six weeks of trading Ideas 2 Go had turned over more than £527million. The company had traded over £47million before they even got round to opening a bank account for the business. Exchequer Secretary, David Gauke said:“This Government will not tolerate dishonest people stealing public money. This sentence shows that those who try to commit fraud need to think again – HMRC will find you and the courts will punish you.“The additional £917m we have invested in HMRC will see more cases like this successfully prosecuted, sending a clear and powerful message:”HMRC Assistant Director for Criminal Investigation Paul Rooney comments: “As a police officer Cranswick knew full well that he was breaking the law, yet; motivated by greed, he chose to overlook it for the opportunity of making what he wrongly assumed would be easy money. He now has to pay a very high price for his poor judgement and lack of integrity.“This was a sophisticated fraud designed to steal hundreds of millions of pounds of tax, but it started to unravel when our investigations identified sales for more than 50,000 mobile phones, which the manufacturers hadn’t even begun producing in their factories.“Other members of the gang included; Nigel Cranswick’s sister, Clare Reid (Smyth), 44, and her husband Darren Smyth, 42, both from Maltby, former railway trackman Brian Olive, 66, from Doncaster, former removal man, Thomas Murphy, 26, from Dinnington and 28 year-old former council housing officer, Andrew Marsh, from Sheffield. The gang operated a number of scams in order to generate their illicit profit. They created false documents relating to the importation, sale and export of mobile phones and software systems. They hijacked the identities of legitimate companies and created fake customers and suppliers to try and give their business an air of legitimacy.It wasn’t long before Cranswick began to reap the benefits of his crime. Following visits by HMRC, Cranswick; worried he had roused suspicion, emigrated to the Spanish town of Marbella. When he realised the company was under investigation he falsely claimed he was getting divorced in an attempt to protect his illicit assets. Within days of registering Ideas 2 Go for VAT, Cranswick was contacted by HMRC compliance officers who raised concerns at his business practices and record keeping. Within a few months HMRC had identified that the business was indeed a scam and began to investigate.Sentencing the gang today His Honour Judge Brian Forster QC at Newcastle Crown Court said:This was an unprecedented attack on the public revenue… The figures in this case are astonishing and reveal a blatant nature of the fraud. They persisted in dishonest trading despite numerous warnings from HMRC.Notes for editors1. Background: Ideas 2 Go Ltd was registered at companies’ house in April 2005, with Nigel Dennis Cranswick as director. The company was registered for VAT in June 2005 and was registered as trading from The Dinnington Business Centre in Dinnington, South Yorkshire. Shortly after a compliance visit from HMRC VAT officers Nigel Cranswick resigned as Director. Thomas John Murphy was appointed as the Director and Darren Smyth took up the role as Company Secretary. Nigel Cranswick still held a 25% share in the business. After only a few months, Murphy resigned and Smyth replaced him as Director of the company with Andrew Marsh appointed as Company Secretary. In December 2005, Smyth resigned as Director and was replaced by former Director Thomas Murphy. Andrew Marsh resigned in December 2005 shortly followed by Thomas Murphy. Brian Olive was appointed Director of Ideas 2 Go Ltd in January 2006 and his son Brian Joseph Olive was appointed Company Secretary. 2. Defendants details:Nigel Dennis Cranswick (DOB: 04.01.64) Current address: 2 Danby Road, Sheffield, S26 6LU formerly of Planta 1, Arhal 1, Alicante Playa, El Rosario, Marbella in Spain. He set up Ideas 2 Go Ltd in April 2005. He was a police officer with South Yorkshire Police between 1997 and 2005. His employment with the South Yorkshire force overlapped with the set-up of Ideas 2 Go Ltd from April 2005 to July 2005. He was charged with Conspiracy to cheat the public revenue and sentenced to ten years and three months. Thomas John Murphy (DOB 20.05.84) of 23 Sycamore Avenue, Creswell, Worksop. A former removal man, Murphy became Director of Ideas 2 Go between August 2005 and October 2005 and then again between December 2005 and January 2006. Murphy was arrested in March 2007. He submitted numerous claims for VAT refunds to HMRC and was questioned about large sums of money passing through the business banks accounts and his own personal accounts. During his time with Ideas 2 Go, Murphy withdrew more than £77,000 cash from ATM machines and paid a local solicitor more than £11,000 in advance of his prosecution by HMRC. He pleaded guilty to charges of Conspiracy to cheat the public revenue and was sentenced to four years and six months.Darren Smyth (DOB 30/04/69) of Beech Road, Maltby, Doncaster, S66 8DB, brother-in-law of Nigel Cranswick and partner of Clare Reid. Registered bankrupt, he was Company Secretary for Ideas 2 Go Ltd between July 2005 and October 2005 and then appointed as Director between October 2005 and December 2005. He was arrested in March 2007 and questioned about the production of falsified hand written ledgers and dubious financial transactions, along with substantial amounts of cash passing through his personal bank accounts. He pleaded guilty to the charge of Conspiracy to cheat the public revenue and was sentenced to three years and four months. Andrew Marsh (DOB 16/07/82) of Wales Hall farm, Church Street, Wales, Sheffield, S26 5LQ. A former council housing officer, Marsh was Company Secretary of Ideas 2 Go Ltd between October 2005 and January 2006. Marsh was arrested in April 2007 and questioned regarding his correspondence with HMRC on behalf of the company and several suspicious cash transfers. He pleaded guilty to the charge of Conspiracy to cheat the public revenue and was sentenced to thirty two months. Brian Olive (DOB: 22.02.55) of Buttermere Close, Carcroft, Doncaster, DN6 8QN.A former railway trackman, he was appointed as Director for Ideas 2 Go Ltd in January 2006. Olive was arrested in June 2006 and questioned about the production of false invoices and illegal money transfers. He pleaded guilty to charge of Conspiracy to cheat the public revenue and was sentenced to three years and four months. Clare Reid (DOB: 10.11.66) of Beech road, Maltby, South Yorkshire, S66 8DB.The sister of Nigel Cranswick and partner of Darren Smyth, she was named as an Administrator for Ideas 2 Go Ltd on the company paperwork and worked for the company from July 2005. She pleaded guilty 2 charges of false accounting and was sentenced to nine months suspended for 18 months, with 150 hours community punishment order. 3. Follow HMRC on Twitter @HMRCgovuk.NAT 91/11Issued by HM Revenue & Customs Press OfficePress enquiries only please contact: