A couple of tax fraudsters, who believed they had devised ‘the perfect scheme’ to swindle the taxman out of more than £46 million, by smuggling wine into the UK, have been sentenced to a total of 17.5 years in prison.
Livio Mazzarello and Louisa Mbadugha, who ran The Italian Wine Company Ltd, deliberately mis-stated how much wine they imported and sold, to evade excise duty and VAT.
However, tax investigators from HM Revenue & Customs (HMRC) discovered that they had used a combination of false paperwork and re-used import documents to try to cover up their London-based smuggling operation.
The wine was then sold to retailers across the UK, with Mazzarello laundering the fraudulently obtained money through various bank accounts.
The tax fraud came to light when taxation investigators from HMRC, working with the Italian Customs Authority carried out a number of searches and arrests across the UK and Italy.
HMRC officers seized 70,000 litres of duty free wine and around £350,000 in cash, hidden in a concealed floor safe and above ceiling tiles at a warehouse in Neasden
The pair, who were found guilty of a number of offences including tax fraud, were found guilty and a judge at the Old Bailey sentenced Mbadugha to three and a half years in prison. Mazzarello, who absconded during the trial, was sentenced in his absence to 14 years.
Sentencing Louisa Mbadugha, His Honour Judge Philip Katz QC, said: “You were foolish to be charmed by crooks. Your role (in keeping records) was critical otherwise this fraud could not have happened. Going to prison will have a profound effect on those you know and your standing in the community which has been destroyed.”
Simon York, Director of HMRC’s Fraud Investigation Service, said: “Mazzarello and Mbadugha thought they had developed the perfect scheme to divert millions of pounds from public finances. They were stealing from the taxpayer and undercutting legitimate traders.
“They believed they could continue without fearing their criminal activities would be detected. They were wrong and we are working to reclaim any money they made from their crimes.”
Dr Anjulika Salhan, a director and tax investigation specialist with Salhan Accountants commented: “It is not surprising that tax fraud on such a large scale has resulted in lengthy jail sentences for both perpetrators. HMRC and the courts will not hesitate to use the full force of the law to deal with anyone who has intentionally set out to commit tax fraud.
“Although only a minority of individuals deliberately set out to defraud HMRC, there are many people who find that they have unwittingly broken HMRC’s tax rules and are shocked to discover that they are under the spotlight of a tax investigation.
“At Salhan Accountants, we work extremely hard for clients subjected to a taxation investigation. We not only clarify the issues and the process, but come up with solutions too.
Our experience, professional reputation, forensic attention to detail and negotiating skills mean we are well-placed to achieve positive outcomes.”
For more information about our taxation investigation services, please contact us.