Fraudsters in £1m tax rip-off caught selling kerosene at illegal petrol station

Frank Daley, his son Jacob O'Callaghan and Danny Williams, all from Wolverhampton, sold 1.2 million litres of kerosene as fuel from the site in Willenhall over a five-year period.

They were jailed for a combined total of more than six years at Stafford Crown Court yesterday.

The fraud came to light when police officers stopped O'Callaghan in a van containing 1,000 litres of kerosene, normally used as home heating oil.

Daley, aged 54, of Tudor Road, Heath Town, first began the illegal business from unit 16 off Phoenix Road in 2009.

The court heard how Daley, described as the lynchpin of the operation, avoided paying £769,122 in fuel duty and £177,236 in VAT.

He was sentenced to five-and-a-half years for fraudulent evasion of excise duty and four-and-a-half years to run concurrent for avoiding VAT following a trial.

O'Callaghan, aged 26, of Fitzmaurice Road, Ashmore Park, was described by Judge Jonathan Gosling during the sentencing as an industrious worker who had served in the Army for two years.

But he was sentenced to 10 months in prison for his two-year involvement in the conspiracy after admitting the same offences, which saw him avoid paying £377,516 in duty and £87,146 in VAT.

Williams, aged 23, of Hampton Road, Oxley, had been part of the scam for five months.

He pleaded guilty of a single charge of fraudulent evasion of excise duty for avoiding £126,151 and was given a six-month sentence, suspended for 12 months.

Mr Peter McCartney, prosecuting, said: "Mr Daly ordered fuel from various legitimate suppliers using his own name and mobile number, as well as fictitious names and addresses when he received deliveries. From early 2011, he used the name 'John'.

"By 2013 Jacob O'Callaghan was receiving deliveries to an address used by himself, which was then transferred to unit 16 in Phoenix Road."

The court heard how HM Revenues and Customs became involved in May 2014 and installed cameras the unit, which showed a constant stream of vehicles visiting. Mr McCartney said the footage showed Daly locking and unlocking the unit on most days, with O'Callaghan directing traffic, filling the vehicles, speaking to delivery drivers and receiving cash.

Williams was also shown directing vehicles, receiving cash for filling vehicles and carrying cans full of fuel to customers.

Revenue officers raided the premises on May 22, 2014, arrested the men and seized fuel pumps, 1,500 litres of fuel and six vehicles, as well as equipment and paperwork, closing the site down. The court heard a search of Daly's house found paperwork relating to fuel sales.

Judge Gosling, sentencing, said: "This was organised fraud and it is clear Frank Daly was the driving force behind it.

"It began in 2009 and continued through to May 2014. It is clear from the footage during the last few weeks before the arrest it attracted a queue of cars and vans over that period of time."

During the investigation, HMRC officers identified the involvement of Daly and Williams, and all three were found to be involved in running the illegal filling station.

Richard Wentel, assistant director of the fraud investigation service at HMRC, speaking after the case, said: "This trio knew they were breaking the law and through this evasion took huge amounts of money away from funding the UK's vital public services. Fuel fraud lines the pockets of criminals and can have a devastating effect on legitimate fuel traders."