Retailer charged with duty fraud after tobacco "scam"

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Retailers are being warned to stick to trusted sources of supply after a store owner in Tyne and Wear was prosecuted for selling counterfeit tobacco which he claims to have bought unwittingly.

A large haul of illicit cigarettes were found in Tajinder Singh’s Washington Wine and Convenience store in Washington, as well as in his home and garage as part of a multi-agency operation last year.

Singh told South Tyneside magistrates Court that he believed the cigarettes were legitimate, despite being sold for around £3 cheaper than at the local cash and carry.

HMRC officers seized 9,400 Lambert & Butler-branded cigarettes from his home, all of which were later found to be counterfeit, the court heard. Some were in the new-style plain packaging and some were in older branded packaging, while all bore the UK duty paid fiscal mark, the court was told.

A further 900 cigarettes were seized from the shop, 640 of which were confirmed to be counterfeit, and all of which were in plain packaging.

Singh claims to have bought the cigarettes through the supplier Go Go Beers who had sent him some advertising.

However the court also heard that officers met with Singh’s external accountant and found he was not aware of the invoices issued by Go Go Beers, the supplier of the fake cigarettes.

It was also discovered that the VAT number used by Go Go Beers actually belonged to a completely unrelated business, which had ceased trading in 2014.

Singh pleaded guilty to fraudulently evading duty on goods. He was fined £640 and was told to pay £85 costs and a £64 surcharge.

Jason Smith, defending, said: “Mr Singh is actually strangely enough the victim. He’s been taken advantage of by what seem to be fraudsters.”

The Federation of Wholesale Distributors (FWD) urged retailers to learn from Singh’s error. Director of communications David Visick said: “It’s very unlikely that a small trader has the buying power to undercut an established cash and carry group by the margin offered in this instance, so alarm bells should be ringing from the start. As this case shows, the penalties for turning a blind eye and not carrying out proper due diligence can be severe.”

A spokesman for Imperial Tobacco, manufacturer of Lambert & Butler cigarettes, added: “We congratulate both Washington police and HMRC on this recent seizure and continue to offer our assistance in any matters relating to the detection and identification of illicit tobacco, but would suggest that the case involving Mr Singh is simply the tip of the iceberg.”

Readers' comments (3)

  • trading standards treat people worse than murderers for selling cigarettes rember the public are willing buyers and some wnt cheap cigarretes to solve problem tax must be cut

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  • Should be sent to jail and his licence for alcohol taken away.These people are facilitating organized crime on a huge scale

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  • How unusual to store cigarettes at home, in the garage and in the shop. Still £800 in fines bargain I’d imagine.

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