Trail of a scam that robbed Customs of pounds 57m

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The Independent Online
THE SCALE of the scam would have brought tears to the eyes of the average fags 'n' booze bootlegger plying their trade between Dover and Calais. A racket that avoided paying duties of at least pounds 57m, and stacked up proceeds running into millions, so many millions that Customs investigators have still not been able to calculate exactly how much the swindle netted.

Britain's largest and best organised smuggling gang, which flooded Britain with cheap alcohol and cigarettes, has been smashed after a year-long international operation by Customs investigators.

More than 430 articulated lorryloads of top brands, including Bacardi, Malibu, Stella Artois drinks and Winston cigarettes were smuggled into Britain. The chieftains of the gang had started buying yachts and villas in Spain from their millions when they were arrested.

A series of trials in which eight Britons were convicted has just ended. Customs are now applying for confiscation orders against several of the men to seize their assets.

At the centre of the racket was Alan Carlton, 48, from Dartford, Kent, the proprietor of Carlton Transport, whose lorries smuggled the contraband.

Photographs of the tattooed and burly Carlton taken in Spain show a hard- faced man with a beer gut, a lurid taste in Hawaiian shirts, an ever present mobile phone in his hand.

Also central was Alan Brown, the 62-year-old chubby, bearded former mayor of Burnham-on-Crouch in Essex. Using the alias of James Heywood, his company, Melrose Trading, was responsible for shipping the contraband.

The third key figure in the racket was Malcolm Hamilton, 54, from Cold Norton, Essex, who eventually gave evidence for the prosecution after going on the run to Turkey.

The racket started with duty-free alcohol and consignments of cigarettes being illegally diverted from the destinations stated on their customs documents. In a vast "carousel" operation, 40ft lorryloads started in England and drove to destinations in Europe before returning home fully loaded. At each point, high-value loads were picked up and dropped off to avoid tax and were sold on the black economy.

For a year, British Customs co-operated with European colleagues to smash the racket. More than 400 Customs officers finally swooped in simultaneous raids across the UK and Europe in late 1995.

Alan Reddrop, the officer in charge of operation, said yesterday: "This was very much an EU racket rather than a UK one. We got a lot of help from our colleagues in Belgium, Spain and France."

There have now been two major trials at Birmingham Crown Court, the first time prosecutions have successfully been brought in Britain for crimes committed elsewhere in the EU. Other prosecutions have taken place in Europe.

Evading tax on alcohol and tobacco is an increasing problem for Customs. They estimated that last year, revenue of pounds 1bn on tobacco and pounds 220m on alcohol was lost to the Treasury. The UK has the highest duties in the EU and Spain has the lowest.

Customs inquiries into the fraud began in autumn 1994 when investigators became suspicious when quantities of an unusual, cheap brand of whisky called "Laird" began turning up on the streets of Liverpool and cities in the North-west. The whisky had been held in a bonded warehouse in Gloucester and was supposed to have been shipped to Morocco via Spain.

Then Customs became aware that the man behind the whisky operation was also looking for a bonded warehouse to store Winston cigarettes for shipment to Morocco. This was odd, because the Moroccan government has a stranglehold over the cigarette trade, and Morocco is better known as a country from which to smuggle tobacco to Europe.

The Customs documents for the alcohol and cigarettes were stamped with false Spanish Customs marks showing the goods had been exported from Spain to Morocco. In fact, neither the lorries nor the booze ever left the UK. Instead, their loads were sold through cash and carry outlets throughout Britain.

The gang then added a twist to the swindle. This time cigarettes actually went to Spain, but were never exported to Morocco. Instead, they were illicitly diverted on to the Spanish home market and sold cut-price. When Customs later went to check the delivery address in Casablanca where 20 lorryloads of cigarettes had purportedly been delivered, they found a small doorway at the end of a narrow alley in Rue de Fes.

The gang also began working on yet another elaborate scam. Lorryloads of beer and spirits were sent from the UK on real Customs documents showing the delivery address of a bonded warehouse in Antwerp - owned by a Belgian company also involved in the fraud.

The alcohol was transported to Antwerp. But Carlton's lorries were either turned round with the same load and smuggled back to the UK, or the goods were transferred to another Carlton transport lorry the next day and smuggled back.

"Many consignments from Antwerp were being conveyed by Carlton's lorries to premises in the Midlands, North-east of England and Scotland," said Alan Reddrop. "The loads were sold through cash and carry outlets in those areas."

In August and September 1995, suspicious local Customs officials in Spain and France arrested several Carlton lorry drivers and seized their loads. On 12 September two Carlton lorries were intercepted in south-west France. One of the British drivers was being accompanied by a Spaniard who turned out to be a known tobacco smuggler. The vehicles and their cigarettes were seized and the men arrested.

Eight days later, a meeting was held in Brussels between senior officials from the UK, Spain, Belgium and France. They agreed to work together to unravel the smugglers' operation. All movements of Carlton's lorries were monitored as they moved to and fro across EU borders. By November, Customs felt they had enough evidence to bring prosecutions. Simultaneous raids were mounted in Birmingham, Leeds, London and Glasgow, and 25 people were arrested. Searches were also carried out in Belgium.

Customs believe the conspirators evaded duty on the 300 lorryloads on the carousel scam, a further 80 lorryloads diverted in the UK and 50 more loads of cigarettes sent to Spain.

There have been two trials dealing with different elements of the fraud. Carlton denied smuggling but was found guilty of the UK diversions . He was jailed for six and a half years. Brown and Francis Savage, 63, of east London, both admitted two charges of smuggling. Savage was jailed for three months. Brown is ill and has yet to be sentenced. Hamilton will serve the equivalent of three years.

Four other lorry drivers, bribed with pounds 600 cash bonuses for each trip, were given suspended sentences of 12 to 18 months for their part in diverting loads.

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