The gang, masterminded by Paramjit ‘Pete’ Bagri, from Holywell, North Wales, bought alcohol from legitimate bonded warehouses under the pretence of shipping them to the Continent.
They then illegally diverted the shipments to various locations within the UK, selling on the beer, wine, vodka and whisky without paying the duty owed.
Gang members Richard “Gerry” Ellis of Chorlton-cum-Hardy, Manchester, and Mohammed Ajmal Tariq of Bathgate, West Lothian, Scotland, are both in prison after convictions in July 2011 for their parts in the fraud.
Ellis, former pub landlord of the now-closed Southern in Chorlton-cum-Hardy, ran a logistics company that collected the consignments of alcohol. He had paid a £120,000 ‘movement guarantee’ to HMRC allowing him to legally move alcohol between bonded warehouses, which he abused to illegally divert the shipments without arousing suspicion.
Tariq ran Direct Plus Distribution, which dealt in the supply and sale of alcohol — he was linked to at least six ‘alcohol diversions’, stealing £600,000 in taxes.
Bagri admitted conspiracy to evade duty before the start of his trial. Ellis and Tariq were found guilty at Manchester Crown Court in June 2011. Bagri was sentenced to five years and five months in prison, while Ellis and Tariq received five-year jail terms.
Confiscation proceedings are now underway involving an analysis of how key figures in the gang attempted to evade taxes and conceal the cash gained from their trade.
HMRC’s assistant director of criminal investigation Mike O’Grady said: “This was a calculated attempt to defraud the public purse and to personally profit from the illegal trade. HMRC is committed to protecting public finances from attacks by organised crime.”
The Government is currently consulting with the trade on how to combat beer-duty fraud.