Smugglers of illegal cigarettes cheated taxman out of £36m
AGANG who smuggled more than 117 million illegal cigarettes into the UK and cheated the taxman out of £36million were caught out by the Encrochat hack.
The Rochdale-based gang smuggled the illicit cigarettes into the country on a ‘massive scale’, hiding them in lorries.
They also sent millions of pounds worth of cash - from selling the cigarettes - out of the UK in the same way to Poland, to a mysterious figure referred to as ‘Big Boss’.
Hazhar MohammadPani, 31, and Hubert Smolarek, 41, were both jailed for more than seven years.
“Although quite short lived, the offending in this case was on a massive scale and it was highly sophisticated,” Judge Nicholas Dean QC told the pair at Manchester Crown Court.
“Encrochat phones, while they are not illegal, have no use other than to criminals who operate at a very high level indeed, as was occurring in the case of Mr Smolarek and Mr Mohammad-pani.”
The highly secure Encrochat network was cracked by law enforcement, and previously secret messages were discovered by police.
The gang brazenly continued their crimes as the country went into the first lockdown, and spoke on Encrochat about how best to avoid getting caught as people stayed at home.
In some of the messages the gang referred to £10,000 bundles of cash as ‘sandwiches’, which they packaged before hiding them in lorries and having them transported to Europe.
Lorries transporting the cash were called sandwich taxis, and the UK was referred to as ‘ The Wild Country’ or ‘The Island’.
The racket made so much money it took the gang hours to count the cash, and they wore face masks to protect themselves from the dust created by the process.
Messages recovered between March and June last year showed that 117-and-ahalf million non paid UK duty cigarettes were smuggled, or attempted to be smuggled into the country. About 14- and- a- half million were seized by the authorities.
The total amount of tax evaded was about £36.5 million, prosecutor James Caldwell said.
The messages showed about £8 million of the proceeds from the sale of the cigarettes was smuggled or attempted to be smuggled out of the country, to Poland.
The authorities stopped about £1.6 million after the cash was seized at Dover in May last year.
Units were operated in Rochdale, Aintree, Haslingden and Loughborough, where cigarettes were unloaded from lorries.
The cigarettes were hidden in the lorries in bags or in hollowed out plasterboard, or had false paperwork to disguise the load as frozen food.
Two of the ‘main organisers’ in the gang were sentenced on Tuesday.
Mohammad-pani, of Entwistle Road, Rochdale, was jailed for sevenand-a-half years.
His barrister Nadeem Aullybocus said Mohammad-pani, who had previously seen ‘poverty’, had been given an offer he ‘ couldn’t refuse for the sake of his family’.
“He was trying to ensure that his children wouldn’t have to see the same poverty,” Mr Aullybocus said.
“He chose the wrong route, an unlawful route.”
When he was arrested at his home, officers discovered £16,655 hidden under a baby’s changing mat and in a nappy bag.
Smolarek, of Bury and Rochdale Old Road, Heywood, was jailed for seven years and four months.
Officers found £13,000 at his home when he was arrested.
Maciej Dzikowski, 49, from London, is due to be sentenced at a later date.
All three men pleaded guilty to fraudulent evasion of duty and conspiring to transfer criminal property.
After the hearing, Carmine Di Franco, Assistant Director of HMRC’S Fraud Investigation Service, said: “In the fight against serious organised crime, the Encrochat operation was the largest and most significant law enforcement activity ever mounted in the UK.
“The recovery of messages helped HMRC to dismantle a significant gang involved in smuggling and supplying illegal cigarettes.
“Organised crime harms communities and businesses and costs the UK millions of pounds which should be spent on vital public services.
“We are determined to cut off the funds that are the lifeblood of serious crime in the UK.
“We encourage anyone with information about the illegal sale of tobacco to report it online or call the Fraud Hotline on 0800 788 887.”
“Although quite short lived, the offending in this case was on a massive scale.”