Tax fraud wine importers served with jail sentences
Two wine importers, who evaded £46.5m in VAT and excise duty by smuggling wine into the UK, have been sentenced for a total of 17-and-a-half years following an HMRC investigation
17 Jul 2017
Livio Mazzarello and Louisa Mbadugha, ran The Italian Wine Company Ltd from premises in Neasden. The company was a registered consignee, meaning the business was approved by HMRC to receive goods from another EU member state under duty suspension arrangements.
However, HMRC found the pair used false paperwork and re-used import documents to smuggle large quantities of wine into the country from Italy, which was then sold to retailers across the UK. Mazzarello laundered the proceeds of the fraud through the company using a string of bank accounts.
In April 2013, HMRC and the Italian Customs Authority conducted a number of co-ordinated searches and arrests in 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 the company’s Neasden warehouse during the searches.
The extent of the fraud, committed between June 2008 and April 2013, is estimated at £46.5m.
Following a trial at the Old Bailey Mazzarello, who was the company’s principal shareholder, was found guilty of evasion of excise duty and VAT and money laundering. He absconded during the trial and was sentenced in his absence to 14 years in prison. HMRC is currently appealing for any information about his whereabouts.
Mbadugha, who was the company’s financial controller, was found guilty of evasion of excise duty and VAT and jailed for three-and-a-half years.
Upon sentencing 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, fraud investigation service, HMRC, 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.’