A gang leader has been ordered to pay back £26 million of the money that he stole from HM Revenue & Customs, or spend a further ten years in prison.

Craig Johnson’s restrained assets include a helicopter, yacht, two properties – one a £3 million stately home – cars, diamonds and Rolex watches.

He is serving a 12½ year prison sentence for his role in leading a gang that stole £138 million in a VAT fraud.

Johnson owned the £3 million stately home Meaford Hall in Staffordshire. His vehicles included an Aston Martin and two Bentleys.

Robert Alder, assistant director of criminal investigation for HMRC, said: “This is one of the largest thefts from public funds that has been brought before the courts following our investigations. It has resulted in one of the longest prison sentences and one of the largest confiscation orders ever secured.”

He added: “Our work, in partnership with the Revenue & Customs prosecution office (RCPO), does not stop with the sentencing of these major career criminals – we will seek to reclaim their criminal profits and put an end to their luxurious lifestyles.”

Johnson has been ordered to repay £8 million within the next 12 months and the rest within a further 12 months under the confiscation order obtained by HMRC on Thursday. The hearing, at Wolverhampton Crown Court, also dealt with two other members of the 12-strong gang.

Alun Milford, head of RCPO’s asset forfeiture division, said: “ Our specialist team will now work to ensure that it [the confiscation order] is paid.”

The gang was caught as a result of Operation Emersed, which resulted in 21 career criminals being jailed.

It operated a scam known as “missing trader” or carousel fraud – a way of stealing from HMRC by creating a sea of bogus paperwork.

In this case, the gang dishonestly manipulated the VAT system through the claimed import and export of mobile phones.

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 that they had been sold on more cheaply, but with VAT added, through a chain of companies known as “buffers”. Sham invoices would be issued.

Once the goods had been sold on a number of times they would be reexported via a corrupt freight forwarding company. The exporter would then claim a credit from HMRC for the VAT paid on the purchase of the phones and the company that “imported” them would disappear when the VAT bill was due to be paid.

The fraud took place over three months. The gang would divide the profits of the fraud and launder them through various bank accounts, some based in Gibraltar and Hong Kong.

An investigation began in 2001, resulting in two separate trials.

Johnson ran Signal Telecom, the principal company in the scam.

dkennedy@thetimes.co.uk

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