Monday, 2 February 2009

Craig Johnson, assets in Dubai may be even more valuable than those already seized in the UK, which totalled more than £6 million (Dh31.5m).

Craig Johnson, 35, was sentenced in 2006 to 12 and a half years in prison, although British reporting restrictions prevented details of his case from being made public until now. After accomplices of Johnson were imprisoned in September, the true picture emerged of the outwardly respectable businessman.Investigators say they believe Johnson’s assets in Dubai may be even more valuable than those already seized in the UK, which totalled more than £6 million (Dh31.5m).Customs officials in the UK seized Johnson’s helicopter, yacht, luxury cars and mansion, all of which were found to have been purchased with the proceeds of crime. At one point, Johnson owned several properties across Dubai, as well as a luxury car dealership and a professional racing team.“It is fair to say that, as extravagant a lifestyle as Johnson lived in the UK, we firmly believe the lifestyle he lived out here in Dubai was as extravagant, if not more so,” said Euan Stewart, criminal investigations director with Her Majesty’s Revenue and Customs (HMRC) in the UK.Investigations into other assets are continuing, with officers keen to establish whether any of his properties in the UAE were, in fact, bought legitimately. Although there is an extradition treaty in place between the UAE and the UK, there is no formal process for recovering the proceeds of crime. Investigators are hopeful, however, of recovering millions of pounds that Johnson has been ordered to repay the British government.
The court records show that Johnson was part of a gang that imported and exported mobile phones between companies owned by gang members, with value added tax (VAT) being kept illegally at every stage of the proceedings. The profits of the VAT fraud were then filtered through a series of bank accounts and business transactions.

The phones were imported – at least on paper – VAT-free from various EU countries. In many instances the phones did not even exist. The paperwork showed they had been sold on more cheaply, but with VAT added, through a chain of companies known as “buffers”. Sham invoices were issued.Once the goods had been sold a number of times they would be re-exported via a corrupt freight forwarding company. The exporter would then claim a credit from the British customs department for the VAT paid on the purchase of the phones, and the company that “imported” them would disappear when its VAT bill was due to be paid.While the fraud was being carried out, Johnson boasted of owning a major car dealership in Dubai. Company records show that Johnson still owns a 12-per-cent share in the dealership, and an employee said he believed Johnson was still owner. No one else at the company would respond to questions about Johnson.In 2002, Johnson spent £1.75m to establish a Dubai rallying team, Protrak World Motorsport Management, and competed twice in the Middle East Rally Championship. But when he was detained in the UK in 2003 and his string of investments unravelled around him, his workers, mostly from the UK, found themselves abandoned in Dubai. The team disbanded soon afterward, and most of the staff have left Dubai.Drivers, staff and management who worked for Protrak all declined to be interviewed for this article.An associate of Johnson’s in Dubai said: “He had private jets and helicopters and whatnot and there are not many expats who have that. Back then, four or five years ago, it was a smaller community, and the big fish seemed even bigger back then.” He said most people in Dubai had “no idea” about the extent of Johnson’s fraud, and that rumours of Johnson’s imprisonment emanating from the UK had reached only a few people Johnson knew in Dubai.In June 2006, Johnson was one of seven men imprisoned in the VAT scam after an eight-month case at Birmingham Crown Court. The scam cost the UK government £68 million (Dh359m) and led to a five-year inquiry by British customs officials. Details of the case emerged only after another VAT fraud case in which Johnson was implicated ended in September.
In November, Wolverhampton Crown Court, which was hearing the HMRC claim for reimbursement, ordered Johnson to pay a further £26m he was found to have made through money laundering, or face another 10 years in prison. He was ordered to pay £8m of that sum within the next year. Mr Stewart said: “This result is down to the excellent co-operation we had from the UAE on a federal level and, in particular, from the Central Bank.”He also paid tribute to the “landmark work” carried out by diplomatic staff in the UAE on creating an extradition treaty between the UAE and the UK, which will facilitate the investigation of money laundering in the country.
Cameron Walker, a law enforcement co-operation counsellor with the British embassy in Abu Dhabi, welcomed the more general efforts to catch British VAT offenders living in the UAE.“There are elements in the UAE – the ministries, banks and police – who are now working very closely with us and realise the extent of the problem,” he said. “The co-operation of the Central Bank, the police and the Government has been tremendous when you consider it is not a UAE problem.”

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