28 Jan 2011

Foreigner organised £3m tax credit fraud

The central member of a gang who stole more than £3m of tax credits has been jailed at the Old Bailey for five years, following a complex international investigation by HMRC.

Lithuanian Ricardas Virokaitis, 37, of Eltham, South East London, was the linchpin of a gang who paid Eastern European women to come to the UK solely to register for benefits and tax credits. Virokaitis and his criminal colleagues escorted the women while they gained the necessary documentation to claim the fraudulent benefits. The women then returned to their home country and the gang accessed their payments via bogus bank accounts. Virokaitis deliberately recruited women with children in order to maximise the amounts paid to each account.

More than 100 women were fraudulently registered for benefits and tax credits. This enabled Virokaitis’s gang to steal over £3 million in bogus tax credit and benefit payments. Before he was arrested Virokaitis was withdrawing up to £90,000 every month from these bogus accounts.

Virokaitis was arrested in September 2010 at Stansted airport, whilst attempting to flee the country on a flight to Lithuania. HMRC officers uncovered a safe house used by the gang in South East London, where they found 93 bank cards and false identity documents hidden under the floorboards.

Simon Grunwell, Assistant Director of Criminal Investigation for HMRC, said:

“Criminal gangs such as this are a menace who steal from honest taxpayers. HMRC is cracking down on fraud in the benefits system and the Government has made a further £900 million available to us for tackling evasion, avoidance and attacks by criminal gangs.”

Confiscation proceedings are ongoing. Other suspected members of the criminal gang have been arrested and the investigation is ongoing.
  • Back in 2006 (says Chris Mullin in his diaries) Alan Milburn was suggesting that Labour needed to scrap tax credits and instead reduce taxes for the poorest: "Tax credits are based on the belief that the state can micro-manage people's lives - and it can't."

    Tax credits are wide open to fraud.

2 comments:

Anonymous said...

Then new Universal Credit will be an automated system which will result in more fraud, more face to face contact with claimants is needed on a regular basis.

I seen claims that have remained in payment for years without any contact.

Why not have 'mystery shoppers' to see how easy it is to get tax credits? I'll pretend to be self employed on £50 pw with 5 kids, the money would roll in.

Anonymous said...

Under Mrs Thatcher, the government massively reduced routine visits to benefit claimants as a way to cut civil servant numbers and save staff costs. Successive governments have continued this trend while also making the system more complicated.