Belfast Telegraph

Tuesday 30 September 2014

Busted, the £10m illegal fuel plant

A Customs official helps to decommission the sophisticated fuel laundering plant near Crossmaglen

The most sophisticated fuel laundering facility ever detected in Northern Ireland has been shut down – on the same day new legislation aimed at jailing fraudsters came into effect.

The complex plant – capable of pumping out 16 million litres of fuel each year – was discovered outside Crossmaglen, Co Armagh.

A huge security operation was in place throughout the day as the system was put beyond use.

Around 73,000 litres of fuel were removed from huge tanks.

Customs officials said it had the capacity to launder 16 million litres of fuel each year, resulting in a loss to HMRC of £10m.

Twenty tonnes of potentially deadly waste was discovered nearby. One man was arrested.

The operation coincided with the introduction of new legislation aimed at tougher sentencing of fuel and tobacco fraudsters.

The Director of Public Prosecutions in Northern Ireland now has the power to appeal sentences for such excise evasion on the grounds of undue leniency.

Despite hundreds of arrests over the past decade nobody in Northern Ireland has been jailed over fuel fraud since 2002.

John Whiting of HMRC welcomed the move, but said more had to be done to eradicate a crime which costs the public tens of millions of pounds annually.

"It really is significant, the amount of money can be made from this type of criminality," said Mr Whiting, who was present in Co Armagh yesterday.

"Probably the public does not realise the amount of money that is available to those engaged in this crime.

"When they buy a tank full of fuel from a filling station it probably comes down to pence and a few pounds.

"But when we build it right up through a laundry plant like we see here it's many thousands and, over the years, millions,of pounds, which is the potential profit for the criminal.

"We do need a serious deterrent factor for those engaged in this crime." In Northern Ireland, the latest estimates from HMRC suggest the UK Government lost about £70m in revenue in 2012.

Illicit sales account for an estimated 12% of all sales – that's down from a high of 40% six years ago – but is still much higher than the average in Britain of 4-5%.

Around 100 fuel laundering plants have been raided in the province over the past three years.

While 58 people were arrested in connection with the crimes, 22 of whom were convicted and with 32 cases pending, no one has ended up in jail.

Last year Revenue and Customs officials dismantled 22 fuel laundering plants – mostly in south Armagh.

Justice Minister David Ford (left) also visited the site outside Crossmaglen.

He said he introduced the legislation in response to concerns raised with him regarding the perceived leniency of sentencing.

UUP MLA Tom Elliott, a Stormont justice committee member, said the lack of a deterrent was "no longer acceptable".

"While I welcome and appreciate this legislation that will allow for appeals against unduly lenient sentences, the numbers of criminals actually being convicted is very small compared to the level of such crimes taking place in Northern Ireland," Mr Elliott said.

"The time has come when stiff custodial sentences need to be imposed and all assets seized of those found guilty."

A brazen, cunningly concealed criminal enterprise

Situated just yards from a primary school and adjacent to a busy road, it is the last place you would expect to find a multi-million pound fuel laundering plant. But that was the point.

Most tanking systems used for the lucrative illicit trade are well-hidden, tucked away in outhouses or buried underground.

The one the Belfast Telegraph visited early yesterday could not have been more brazen.

Five huge blue tanks were positioned in the middle of a small business park.

Those who operated it did so under the guise of a legitimate fuel business.

Behind the facade, a laundering system described as the most sophisticated of its kind to be discovered here.

Clever pipework and engineering systems were concealed behind an otherwise unremarkable set-up.

Four of the tanks were used for lawful purposes. The fifth masked a £10m-per-year secret.

It was used to remove the colour marker from red diesel, which is cheaper to buy because of its intended use for agricultural vehicles only.

It is illegal for regular road users to fuel their cars with it.

Once treated the fuel was funnelled underground into hidden storage containers.

The fraudsters had taken maximum precautions, inserting fake drains under manholes to deceive anybody who inspected them.

With an automatic system placed within the tank there was no need for it to be manned.

The plant was raided back in October and yesterday Customs officials returned with police and environment agency staff to put it beyond use.

Based roughly a mile from the border and in the heart of what was known during the Troubles as 'bandit country', the operation required a huge security presence.

Officers armed with automatic weapons manned roadchecks on all routes surrounding the site.

They were backed up by a colleagues in unmarked police cars dotted throughout the area.

Customs officials also wore protective vests. A block was placed on social network activity regarding the site until all of the authorities had vacated the area.

John Whiting of HMRC said the detection had been testing for the investigators involved.

"What's significant about this is it's out in the open," he said.

"Most laundering plants we find are hidden within rural accommodation, warehouses and sheds.

"It's covert by being overt.

"It was very difficult for our guys to find it, but we persisted and did find it.

"It's the most sophisticated laundering plant we have ever found."

Children's toys from the school were feet away from potentially lethal waste from the plant, which had been dumped on the site.

"It's next to a town, it's on commercial premises so there is that degree of cover for the criminals," added Mr Whiting.

"But it's next to a primary school as well. There's a whole lot of toxic waste which the environment agency staff are dealing with.

"There is no consideration for the larger public. The waste product, the revenue that's being lost, undercutting the legitimate traders engaged in this trade.

"There is no recognition of that, it's pure profit for a small number of individuals."

Contractors spent yesterday examining the complex myriad of tanks and drains before they were hard-filled so they cannot be used again to produce illicit fuel.

HMRC took the lead on the operation, with police and the Environment Agency on site.

Justice Minister David Ford visited the plant on the day legislation was introduced regarding the penalties for fuel laundering.

He said he was confident it would result in fraudsters being jailed – something which hasn't happened in Northern Ireland for over a decade.

"At the moment we estimate about 27% of the diesel used in Northern Ireland is not UK tax paid," he added.

"Just under half of that is tax paid in the Republic, but just over half is not tax paid at all.

"That's why we need resolute action, and we also need to remind people of the dangers of supporting these criminals."

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