Stafford mastermind of £1.5m VAT scrap fraud jailed for five years

A fraudster who masterminded a £1.5 million VAT scrap metal scam in Staffordshire and the West Midlands that bank-rolled a luxury lifestyle has been jailed for five years.

Michael Bostock drove a fleet of high-performance cars paid for with money made from his fraud.

The 37-year-old's fleet included a £274,000 Mercedes McLaren, a Ferrari Scaglietti worth £185,500 and a £150,000 Lamborghini Gallardo along with a similarly priced Ferrari Spider, Aston Martin and Porsche.

Father-of-three Bostock, whose two homes included a property in Penzance Way, Stafford, and a £1.4m cottage in Cheshire, tried to hide from Proceeds of Crime investigators up to £500,00 that had been plundered during the fraud.

The shameless trickster also conned £100,000 worth of first-class holidays in Indonesia and Dubai out of travel agents after getting the trips on tick and never settling the bill.

Five British businessmen each lost around £200,000 after being tricked into investing in bent businesses connected to the scam with the promise of unbelievably high returns on their money.

Bostock was the director of Staffordshire-based International Electrical Distributors Ltd (IED Ltd) which was at the centre of the fraudulent purchase and resale of copper, tin and nickel.

Among those also involved was 47-year-old freelance metal trader Michael Davies of De Havilland Drive, Yarnfield, Stone, who was employed as a "consultant" by Bostock's company and helped set up the bent deals. He was jailed for three years yesterday.

The racket involved creating false sales and purchase invoices to make it seem that scrap metal had been sold to a business in Cyprus through Ireland and Belgium before being bought back by IED. This let the plotters pocket £1.5m VAT on the deals because the tax is refunded on exported metal.

In fact these shipments never left the UK. They were diverted to another scrapyard in this country and so VAT should have been charged.

The ring was smashed in a series of dawn raids in January 2008 after a 14-month investigation.

It led to lengthy legal proceedings which could not be reported until Bostock, Davies and four other men – all of whom either admitted or were convicted of fraud – had been sentenced yesterday.

Judge Ian Tomlinson, sitting at Warwick Crown Court, told them: "This was a professionally planned conspiracy. You were living beyond your means, living the high life at the expense of the taxpayer."

Bostock is already serving an 18-month prison sentence for his attempt to try to hide proceeds of the crime from investigators.

He was locked up last October after pleading guilty to 77 Contempt of Court charges in relation to the money and assets but that could not be reported at the time.

Also jailed yesterday was his right-hand man, 41-year-old Mohammed Shabir Hussain, from Newcastle under Lyme, who created the blueprint for the fraud and prepared paperwork. He was sentenced to four years.

Nicholas Richmond, 43, from Great Missenden, Buckinghamshire, and a director of Cypriot company Shavondra Ltd got three years.

He followed the orders of Bostock, Davies and Hussain to draw up paperwork that purported to show the movement of metals between Shavondra in Cyprus and IED in the UK. Richmond secured a £1m investment from UK residents on the promise of high returns from metals commodity trading. These sums were used to fund the fraud and few investors received any returns.

Michael Bexon, 56, from Stoke on Trent, whose freight forwarding companies moved scrap metal for IED in this country with false paperwork that appeared to show the loads were being exported, received a 12-month suspended prison sentence.

Jamiel Hussain, 35, brother of Mohammed Hussain worked in the office at IED and was involved in the false paperwork.

He was given a nine-month suspended jail term.

About £193,000 in cash has already been seized from the fraudsters and inquiries are continuing to recover more.

By John Scott