Romford man jailed for £3.5m organised crime fuel fraud
- Credit: HMRC
The former owner of a Sussex petrol station has been sentenced for distributing and selling illicit fuel to unsuspecting motorists as part of a £3.5million scam.
Dean Chapman, 43, from Crow Lane, Romford, and his brother Darren, 50, from Rochester, illegally mixed kerosene with diesel and sold it as legitimate road fuel to motorists at their petrol station in 2012 and 2013.
HM Revenue and Customs (HMRC) officers found quantities of kerosene, which is not approved for road use, at a Pulborough petrol station in 2013.
It was discovered during routine checks of the petrol station's underground diesel tank as well as the fuel tanks of two vehicles, which were both seized.
HMRC investigators found that Christopher Reardon, 56, from Hastings, supplied kerosene to the Chapmans and falsified 679 sales invoices to hide the true identity of his customers in an attempt to disguise their fraudulent scheme.
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As a registered dealer in controlled oils (RDCO), Reardon had a responsibility to check the fuel sold was being used for a legitimate purpose, his failure to do so resulted in this fraud being able to be committed.
Despite HMRC's intervention and the investigation by West Sussex Trading Standards, the gang continued to carry out the fraud, switching from kerosene to biodiesel in an attempt to further their deception.
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This led to the investigation by HMRC.
They used biodiesel supplied by Carole O'Hara, 68, and Peter O'Hara, 72, both from Hastings, who falsified invoices and HMRC returns to show lower rates of Excise Duty and VAT, which reduced their tax liability.
The illicit mix was never properly labelled so that customers did not realise they were buying fuel with high percentages of biodiesel.
As a result, customers began experiencing problems with their cars which they reported to West Sussex Trading Standards.
As well as the multi-million pound fuel fraud, the Chapmans also failed to pay any VAT.
Darren Chapman and Christopher Reardon were found guilty of the fraudulent evasion of excise duty and VAT.
Dean Chapman was found guilty of the fraudulent evasion of VAT.
Darren Chapman and Dean Chapman were also found guilty of fraudulent trading on July 26, 2019 after a trial at Wood Green Crown Court. Yesterday, Thursday, September 26, they were sentenced at the same court.
Dean Chapman was sentenced to four years and six months, Darren Chapman was given eight years and two months and Reardon four years.
For their part in the fraud, Carole O'Hara and Peter O'Hara were sentenced to two years in prison, suspended for two years, and ordered to pay £40,000 of costs each.
On sentencing, His Honour Judge Lucas said: "It was a deliberate, gross and continued trick on the general public."
Darren Chapman was described by the judge as "dishonest and prepared to break the law when it suits you", while brother Dean "took to dishonesty with enthusiasm".
West Sussex Trading Standards team manager Richard Sargeant said: "This was an incredibly serious matter which caused huge inconvenience to customers as well as repair costs totalling more than £70,000.
"While it cannot take away from the frustration suffered by customers, I hope the outcome of this case will act as a deterrent to anyone else considering illegally mixing fuel."
Assistant director at the Fraud Investigation Service, HMRC, Richard Wilkinson said: "The gang knew what they were doing was wrong but even after being challenged by HMRC officers and investigated by Trading Standards officers, they continued to flout the law and sell illegal fuel, which damaged vehicles engines and resulted in a tax loss of nearly £3.5m - money needed to fund our public services.
"HMRC continues to target fuel fraud which creates an uneven playing field for honest businesses.
"We urge anybody who knows of people committing tax fraud to report them to HMRC online, or call our Fraud Hotline on 0800 788 887."