Second suspect arrested in €29m VAT fraud investigation

Gardaí believe mastermind behind cross-border ‘carousel’ scam is based in North

The Garda inquiry into the VAT-based fraud has been ongoing since 2017. Photograph: Frank Miller/The Irish Times

The Garda inquiry into the VAT-based fraud has been ongoing since 2017. Photograph: Frank Miller/The Irish Times

 

A two-year criminal investigation into a suspected €29 million cross-border VAT fraud has resulted in the arrest of a second suspect.

Gardaí believe a man based in Northern Ireland but who has business interests south of the border in Co Louth is the mastermind of the scam, which is based on VAT carousel fraud.

It has involved the claimed movement, purchase and sale of goods between different companies in the North and Republic for a number of years.

The criminal profits arise when those involved apply for VAT refunds on the so-called goods bought and sold between jurisdictions despite the fact no VAT was ever paid and in most cases the goods never existed.

A man in his 50s arrested on Wednesday was taken to Castlerea Garda station in Co Roscommon for questioning where he remained on Thursday evening.

He was being detained under Section 50 of the Criminal Justice Act 2007. It allows for a suspect’s detention for up to seven days without charge and is used by gardaí investigating alleged serious organised crime.

His arrest comes three months after a woman in her 40s was arrested under the same provisions. She was released without charge after questioning.

Prime mover

Neither the man arrested on Wednesday nor the woman arrested in May is regarded as the prime mover. The chief suspect and the man regarded as the controller of the criminal enterprise has yet to be arrested.

The inquiry into the VAT-based fraud has been ongoing since 2017. In September of that year 15 commercial and residential properties were searched across the four provinces, with the co-operation of the PSNI in the North.

Transfers of money between bank accounts in Ireland and to banks in other jurisdictions were reviewed

At that point the inquiry, which is being led by the Garda’s National Economic Crime Bureau, seized a large volume of digital and hard copy records.

Since then transfers of money between bank accounts in Ireland and to banks in other jurisdictions were reviewed on suspicion they were linked to the VAT carousel fraud.

Gardaí are working on the theory the man who lives in the North and has interests in Co Louth is effectively the principal of an organised crime gang that has run the fraud and controlled the bank accounts.

The investigation is being carried out by the Garda National Economic Crime Bureau, supported by the Criminal Assets Bureau, Garda National Drugs and Organised Crime Bureau, Revenue, the PSNI and the British National Crime Agency and Her Majesty’s Revenue and Customs Agency.