Multi-Million-Pound Carousel Fraudster Stripped of his Personal Pension

Crime may appear to pay handsomely in the short term, but when the law catches up with wrongdoers they are routinely stripped of everything they have dishonestly gained. In a case on point, a man who engaged in a multi-million-pound VAT fraud failed to protect even his personal pension from seizure.

The man and a co-accused perpetrated on a grand scale a so-called carousel fraud on HM Revenue and Customs (HMRC). Following his conviction on a charge of conspiring to cheat the public revenue, a confiscation order was issued against him under the Criminal Justice Act 1988.

The order was initially made in the sum of £92 million, calculated on the basis of sums that had passed through the bank account of the fraudsters’ company. However, following an appeal, that was reduced to £16,145,098 in order to reflect the actual loss to HMRC. A receiver was later appointed to enforce the order against the man’s assets, but an issue arose as to whether his two personal pension policies fell within the ambit of the order. A judge ruled that they did.

In challenging that decision before the Court of Appeal, the man pointed out that the policies would have no realisable value until they matured some years hence. In dismissing the appeal, however, the Court noted that there was no dispute that he had a financial interest in the policies. The judge had rightly viewed the policies as realisable property, within the meaning of Section 74 of the Act. The receiver was thus entitled to take enforcement action in respect of them.