‘Scandalous’ RBS helped fraudsters cheat the taxman

‘Scandalous’ RBS helped fraudsters cheat the taxman as High Court rules it was involved in £45m VAT fraud

  • RBS has been accused of ‘scandalous’ behaviour after a High Court decision 
  • A judge found it guilty of offering fraudsters ‘dishonest assistance’ 
  • Two RBS traders were found to have lied over the carbon credits fraud in 2009 

Taxpayer-owned Royal Bank of Scotland was last night accused of ‘scandalous’ behaviour after the High Court decided it was involved in a £45million VAT fraud.

The bank will now have to pay out tens of millions of pounds after a judge found it guilty of offering fraudsters ‘dishonest assistance’ in cheating the taxman. It is appealing the ruling, made last month.

The ruling that RBS traders turned a blind eye to the fraud – only months after the taxpayer had rescued the bank in the financial crisis – will infuriate politicians and the public.

Siobhain McDonagh, a member of the Treasury Select Committee of MPs, said: ‘It is scandalous. The last thing you would think is that a bank funded by the taxpayer would defraud the taxpayer.’

Justice Snowden found two RBS traders had lied over the carbon credits fraud in 2009 

Justice Snowden found two RBS traders had lied over the carbon credits fraud in 2009. The credits allow companies to buy the right to emit greenhouse gases from other firms. 

Andrew Gygax and Jonathan Shain, who worked for RBS subsidiary RBS Sempra Energy Europe Ltd, were found to have given ‘untrue’ evidence designed to ‘conceal’ the fact they did not want to ‘risk…the extraordinary levels of very profitable trading’.

The Court was also told by a key witness that trades facilitated by RBS and RBS Sempra over a matter of weeks saw Revenue & Customs defrauded. It lost out on an estimated £45million. 

Justice Snowden said: ‘I find both RBS and RBS SEEL liable for dishonest assistance and knowingly being a party to fraudulent trading by the Claimant companies by reason of RBS’s trading with CarbonDesk from 26 June 2009 to 6 July 2009.’

The credits were bought in France then imported into Britain through a series of allegedly sham or fraudulent companies. 

Gygax and Shain bought millions of credits from these firms and sold them abroad.

RBS is being pursued by accountancy firm Grant Thornton, acting for the Revenue, which complained it did not receive the VAT that was due from the carbon trading, and other creditors left out of pocket.

RBS Sempra was sold off and is now called Mercuria Energy. 

It is being sued alongside NatWest Markets, part of RBS. Shain and Gygax no longer work for RBS or Mercuria. 

Shain said: ‘I am disappointed with the judge’s decision.’ Gygax could not be reached for comment.

NatWest Markets said: ‘This claim concerned trading undertaken over a short period in 2009 by former employees of a legacy joint venture company that was sold in 2010. We are very disappointed with the decision and are appealing it.’

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