Five directors of a number of Northern Ireland building companies have been arrested in an operation against an alleged £10 million fraud in the construction industry, according to the Police Service of Northern Ireland. Three of them have been released on police bail.
The arrests were made yesterday morning following an operation lasting a number of months that involved more than 100 police officers and inland revenue personnel from the North, Scotland and Wales, said assistant chief constable Mr Alan McQuillan.
A total of 25 premises were raided in Northern Ireland, Scotland and Wales yesterday, said Mr McQuillan. The Northern Ireland end of the operation was mainly focused on Belfast, Dungiven, Rostrevor and Downpatrick, during which documents and computer records were seized.
"We are investigating a major multi-level tax fraud in the construction industry," said Mr McQuillan. The alleged fraud was being led by a small number of Northern Ireland companies, and sub-contractors were also involved in the "complex" operation, he added.
The alleged crime involved companies employing people who were not being paid properly and who were not paying tax or insurance. Many of them were also claiming social welfare. The fraud also involved false company invoices and tax returns which were being bought through a network of sub-contactors, said Mr McQuillan. At this stage there was no evidence of paramilitary involvement in the fraud. It also appeared to be confined to UK jurisdictions, he added.
The North's Security Minister, Ms Jane Kennedy, who is chairwoman of the North's Organised Crime Task Force, said such fraud was robbing the UK exchequer of funds for public services, and undermined honest businessmen and women.
"This should serve as a strong deterrent to those contemplating this type of criminality," she said.
The arrests coincided with a report from accountants Price Waterhouse Coopers claiming that almost 40 per cent of major companies were victims of fraud, with most cases relating to "inside jobs".
The crimes ranged from internet fraud to embezzlement, with fraud by senior executives and workers posing a greater threat to companies. So-called cyber crime was identified as one of the biggest future risks, with 25 per cent of organisations believing that they would be hit within five years.