21 arrested in subcontract labour scam

21 people were arrested today in dawn raids by HM Revenue & Customs (HMRC) officers investigating a multi million pound construction industry fraud.

Eighteen men and three women from the West Midlands, Staffordshire, London and Manchester were arrested on suspicion of conspiracy to cheat the public revenue and money laundering offences amounting to over £6 million. They are currently being questioned by HMRC criminal investigators at police stations across the UK.

The plot is believed to have been orchestrated by organised crime gangs in a bid to steal millions of pounds in a complicated conspiracy through a version of ‘missing trader’ fraud. This sees the creation of a contrived chain of companies, which claim to subcontract labour for the construction industry, with the sole intention of disappearing before paying the taxes due to the public purse. They pocket the money and hijack legitimate companies along the way.

The conspiracy exploits individuals working in the construction industry and abuses the government scheme that regulates the industry’s tax affairs. It is thought thousands of construction site workers may have been robbed of the tax and national insurance contributions they believe they have paid over the last six years.

Over 40 search warrants were executed at residential and business premises in the West Midlands, Staffordshire, Nottingham, London and Manchester. Further searches are underway.

Cash totalling £73,000 has so far been seized along with paperwork including bank accounts and computers, Class A drugs and associated equipment.