Grant Thornton sues RBS for £145m in VAT carousel fraud action

Grant ThorntonAnother week and its another legal action for RBS. It has now emerged that the 73 per cent state owned bank is being sued for £145 million by liquidators at Grant Thornton acting for the creditors of a number of fraudulent companies engaged in a VAT carousel fraud in which carbon credits were being traded.

The legal action dates back to 2009 after the bank was bailed out by taxpayers. Documents seen by The Mail on Sunday reporters allege that two traders at the bank carried out deals which aided fraudsters to cheat Revenue & Customs out of millions of pounds in VAT.

High Court documents seen by The Mail on Sunday claim that RBS traders were “wilfully shutting their eyes to the obvious, which was that there was no legitimate explanation for the trades and that they were connected with VAT fraud”.

It is claimed that RBS traders bought the carbon credits and then sold them abroad before claiming a VAT rebate from the Revenue to which they were not entitled.

Between June 8 and July 6, 2009, the court papers state, RBS traders bought 43 million carbon credits linked to allegedly fraudulent companies.

The deals were said to have been conducted by two traders who were employed at the bank’s commodities trading division RBS Sempra.

Grant Thornton contend that the RBS traders – and therefore the bank as their employer – should have realised the trades they were being asked to carry out were part of a fraud and so, are liable to repay the VAT.

The traders who are no longer employed by RBS are accused in the documents of “recklessly failing to make such inquiries as an honest man would”.

The claim highlights emails at RBS, including one sent by its Money Laundering Unit warning that RBS was ‘being targeted by carousel trading fraudsters’.

In 2013, a report by BDO estimated that VAT fraud costs Britain more than £3bn a year.

A spokesman for the bank said: “RBS denies these allegations and will vigorously defend them.”

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