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UK Customs denies pressurising banks to pull out of mobile sector

"We have chosen to end the banking relationship between your company and HSBC." With these words, over 150 mobile phone dealers in the UK have suddenly found themselves treated as money-launderers - and HM Revenue and Customs is said to be behind it. Some dealers say the Revenue is instructing banks to dump its mobile customers.

A detailed report in this week's Mobile News makes it clear that a simple denial by the Customs officers won't be found convincing.

According to a Birmingham law firm, Dass Solicitors, which is preparing a case against the banks on behalf of more than 150 mobile phone traders, it seems likely that the banks are taking orders from on high.

Customs denies this, but Mobile News has found a Customs expert, Vincent Curley - managing partner at VAT consultant Curley & Co - and Curley says it's quite plausible. Customs, he says, does put pressure on banks, and has been shown to do so in the past.

"I would expect Customs to point out to a bank their money laundering obligations," said Curley, "and I know from advising on the mobile industry that main high street banks close down the bank accounts of mobile phone traders without proper explanation."

At issue is whether Customs is targeting the mobile sector as a whole, or whether it is aiming at a few, known suspicious dealers. Mobile News says it has seen bank letters which use the word "sector" which is suspicious. The bank concerned admits that it did use the word, but describes this as a "mistake" and denied Customs pressure.

The UK mobile dealer industry definitely does include some very shady characters, and phone thieves in Britain have no difficulty in finding dealers to take stolen goods and help them export them to other countries. There is also a long-standing feud between Customs and the mobile industry over VAT fraud - as a means of laundering the proceeds of crime, says the Excise lot.

The newspaper, which goes out to the distribution channel for mobile phones in the UK, printed a sample letter from HSBC. It said: "We are concerned at the number of high value electronic payments that we are being asked to undertake for the Company on a regular basis. We are also concerned that the current operation of the account is not consistent with our understanding of this business when the relationship commenced."

Bank staff contradict the assurances of their head offices, who say there is "no question" of their targeting a business or a sector at the say-so of HM Revenue and Customs, claims solicitor Alias Dass. He says he "has it on good authority" that bank workers have seen documents which make it clear that there is a policy of scepticism about mobile traders, and that the reason for this is information from Customs.

The news breaks at a time when the Customs officers are nursing a bloody corporate nose after "Operation Venison" collapsed, with the Judge awarding six million pounds of costs to the defendants.

Operation Venison was a case of "carousel fraud" where consignments of phones are moved rapidly from one dealer to the next, with each claiming refunds of VAT; the system is open to abuse. However, the Judge appears to have taken the view that the Revenue staff went beyond their remit.

The collapse of Operation Venison leaves the enforcers in a situation where they need to catch up with an undoubted network of crooks, but without the freedom to take action which might snare innocent, or at least unprovably guilty, operators.

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See also some of these tags relating to money laundering, HM Customs, carousel fraud