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Carbon Traders Busted – For Tax Fraud

From the ever vigilant New York Times:

Carbon Traders Arrested for Tax Fraud

August 20, 2009
By James Kanter

British customs officials arrested seven people near London on Wednesday Thursday who are suspected of dodging taxes that should have been paid for selling large amounts of carbon dioxide permits — the main currency in the European Union’s Emissions Trading System.

The suspected fraud amounted to £38 million, or nearly $63 million, the British tax agency, HM Revenue & Customs, said in a statement.

“It is thought that the proceeds of this crime have then been used to finance lavish lifestyles and the purchase of prestige vehicles. Further arrests are likely and the investigation continues,” the agency said, adding that it had searched 27 properties during the sweep and used dogs to search for cash.

Many polluting businesses in Europe are required to buy the permits, which are part of a cap-and-trade system similar to the one under consideration in the United States, and which currently trade for about 15 euros ($21) for each ton of CO2 emitted.

The market, created in 2005, has been criticized for volatility and for rewarding some of the largest utilities with billions of euros in windfall profits.

This year, some analysts said the market was finally showing signs of working, by pushing companies to switch to cleaner technologies, such as using natural gas instead of coal, to produce electricity.

British officials said the people arrested could be part of an organized group that operated a network of companies trading large volumes of the permits. The officials did not name those arrested. The agency said the fraud was carried out by companies in the network that bought the carbon permits outside of Britain without paying Value Added Tax, a levy known as V.A.T.

The companies in the network are suspected of adding the V.A.T. to the price of the permits, which they sold in Britain. The companies then disappeared before paying the tax to British authorities.

Last month, Britain exempted carbon trading from the V.A.T. to curb the possibility of similar cases in the future. France and the Netherlands took similar steps earlier in the summer. Even so, the tax agency said it “still intends to pursue relentlessly those that may have used carbon credit trading to cheat the public purse.”

Isn’t irony ironic?

It is thought that the proceeds of this crime have then been used to finance lavish lifestyles and the purchase of prestige vehicles.

Talk about a blow on a bruise.

Still, money is green, is it not?

This article was posted by Steve on Thursday, August 20th, 2009. Comments are currently closed.

13 Responses to “Carbon Traders Busted – For Tax Fraud”

  1. arb says:

    Obama administration cabinet positions to follow….

  2. Lisa22 says:

    Alright!! You just got mentioned for this article on Rush Limbaugh!!

  3. pdsand says:

    “Last month, Britain exempted carbon trading from the V.A.T. to curb the possibility of similar cases in the future. France and the Netherlands took similar steps earlier in the summer.”

    That’s the brilliant solution?

  4. pdsand says:

    “The market, created in 2005, has been criticized for volatility and for rewarding some of the largest utilities with billions of euros in windfall profits.”

    As always, if the utility company is engaging in trading carbon credits as a legally required part of its business, then the profits from carbon trading are not windfall profits.

  5. Right of the People says:

    I’m shocked that this could happen, shocked I tell you.

  6. proreason says:

    sniff.

    sniff.

    sniff.

    smells to me like George Soros is involved.

  7. Colonel1961 says:

    How do I get in on this scam?!?!

  8. Rusty Shackleford says:

    Well I, for one, am glad to know that such things could NEVER happen here. Man alive, with our diligent, intellectual, fact-finding government at the wheel, no such impropriety or shenanigans could ever occur.

    (I know, it didn’t sound right in my head, either)

  9. MinnesotaRush says:

    Step right up, folks!

    Got your Carbon Credits right here.

    Get your best price anywhere .. and our qualified .. certified .. deified .. Carbon Credit Consultants will beat ANYBODY’S price by 30%!!!

    And .. we’ll give you a dandy certificate of purchase showing you have the Credits AND that we paid the tax!!!

    Buy now!!! There’s only so many credits to go around in any area. Tomorrow .. they .. (and us) .. could be gone!!!

  10. Helena says:

    “It is thought that the proceeds of this crime have then been used to finance lavish lifestyles and the purchase of prestige vehicles.”

    Prestige vehicles? You mean they sold carbon credits and bought gas guzzlers?

  11. Liberals Demise says:

    Talk about a “First Class” ponsi scheme …………. anybody seen Al lately?

  12. Emerson says:

    Ever vigilant NYT?
    Did you notice that the names of the perps were left out?
    What’s the probability of the ethnicity of the perps being the same as the owners of the NYTs?


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