Smashed: the fuel smugglers' secret network
The million pound fuel smuggling operation shut down by a landmark legal move this week involved a cross border network fed through a filling station in Castleblayney, Co Monaghan.
Almost three-quarters of the fuel marked down as being delivered to the petrol outlet was actually being illegally shipped across the border where it was fed as cut price oil to four filling stations in Armagh and Tyrone run by the smugglers, other independent retailers, and haulage firms.
Two of the smugglers — Armagh couple Bernard Joseph Hughes and Fionnuala Kelly, who share a home at Cathedral Road, Armagh — have to forfeit more than a £1 million because of their central roles in the ring.
All four members of the network — Bernard Hughes (48), Kelly (39), Malachy Hughes (54), from Portadown Road, Armagh and Bernard's brother, Michael Hughes (58), from Castleblayney Road, Keady — have been put out of the oil business.
They were handed the UK's first-ever Serious Crime Prevention Orders after admitting revenue evasion at Newry Crown Court this week. Those orders, which were introduced into UK law last October, mean they cannot deal with fuel for the next five years.
A Crown Court judge said the quartet were "professional smugglers" in a case that represents a major victory for Customs in their battle against fuel fraud. They were all given suspended sentences.
The four were arrested on November 3, 2004, when Customs officer raised their premises — a distribution centre known as Chevron Enterprises Ltd (CEL) in Keady, Co Armagh, an office and four filling stations — seizing 50,000 litres of fuel and a tanker.
Customs investigators believe CEL received smuggled fuel from the Republic distributed it to Dollingstown Service Station, Springisland Service Station, Windmill Service Station and Keady Service Station in Counties Armagh and Tyrone. CEL and the four filling stations were under the control of the Hughes' as directors, partners or sole traders.
Customs surveillance officers estimated that about 70% of fuel purchases and sales were not declared.
Business connections across the border are believed to have facilitated the scam. Bernard Hughes was linked to a fuel company in Dundalk and Malachy Hughes was director of the filling station in Castleblayney that was central to the operation.
Sentencing the four this week, Mr Justice Stevens said: "These were four professional smugglers. There was a clear pattern of deliveries made mainly in the early morning, with tankers scouted to filling stations controlled by the defendants, evidenced by Customs and Excise surveillance."
Bernard Hughes was also hit with a confiscation order worth £975,000 — worth almost four times the amount seized from fuel fraudsters in the past six years.
Kelly was hit with an order seizing £175,000 and Malachy Hughes forfeited £50,000.
The three have until October 21 to raise the cash or be sent to prison. Bernard Hughes faces a five-year term, Kelly faces three years and Malachy Hughes 18 months if the money is not paid.
But the major departure in the case was in Customs obtaining the new Prevention Orders. Not only are the four blocked from having anything to do with the fuel business for five years, they are also required to hand over legally sworn lists of all their assets, financial affairs and bank accounts.
Police or Customs can then inspect those accounts at any time during the next five years.
John Whiting, the assistant director of criminal investigation in HM Revenue and Customs, said the decision to use the Prevention Orders shows Customs takes "the problem of oils fraud in Northern Ireland very seriously" .
"We are committed to tackling the illicit fuel trade at all points of the supply chain, from smuggling and laundering through to storage, distribution and eventual use.
"Serious Crime Prevention Orders are an important new tool to aid the reduction of harm caused by organised crime," he said.
"Along with the Proceeds of Crime Act 2002, which was specifically designed to take the profit out of crime, Serious Crime Prevention Orders make it harder for criminals to benefit from their illicit wealth."