Exchange Chambers barristers successfully prosecute Organised Crime Group of “almost unimaginable scale”

February 26, 2020

Stephen Grattage (leader) and Caroline Abraham from Exchange Chambers have successfully prosecuted 12 members of an organised crime group after the disruption of the largest commercial counterfeit cigarette and hand rolling tobacco production line was discovered in the United Kingdom.

HM Revenue and Customs (HMRC) carried out coordinated raids at properties linked to the gang in County Durham and South Yorkshire in November 2015.

Officers discovered the largest tobacco factory ever encountered by HMRC inside a farm unit in Crook, County Durham. The factory had more than 24 tonnes of tobacco inside, along with 500,000 cigarettes, old imperial tobacco machinery and products used to make the cigarettes. Officers also discovered caravans that were being used by the factory workforce.

The cigarettes produced at the factory were moved to a nearby garden centre, before being distributed to locations in the North East and South Yorkshire.

HHJ Reeds QC described the Defendants as participating in an enterprise of “almost unimaginable scale and sophistication to evade duty due to the government by producing and distributing cigarettes and hand rolling tobacco… I am sure that the total loss in duty evaded over the indictment period was well over £10 million. I suspect that the duty evaded was in the tens of millions of pounds”.

Eden Noblett, Assistant Director, Fraud Investigation Service, HMRC, said:

“This was a highly sophisticated and well organised illegal operation, which put millions of counterfeit cigarettes on the streets of the UK.

“The illegal tobacco factory was the largest HMRC has ever found, and was capable of producing commercial quantities of cigarettes. The weight of the tobacco found at the factory was equivalent to two London double decker buses.

“Trade in illegal tobacco undermines legitimate traders, including small, independent shops that serve local communities, and takes funding away from our vital public services.

To date, Operation Hairball II has resulted in the Defendants being sentenced to a total 30 years imprisonment for the fraudulent evasion of duty.

Stephen and Caroline are members of the Criminal Department at Exchange Chambers.