Six men jailed following €300million tax evasion on carbon permits

Three Britons and three other men have been sent to jail for evading tax on EU carbon permits.



A judge in Germany said the defendants' €300million (£250million) conspiracy had undermined efforts to tackle climate change and 'brought the scheme into disrepute'.



They have been handed jail terms of up to eight years each for their role in the attempted VAT scam between August 2009 and April 2010.



Pollution: A £250billion tax-evasion scheme has undermined the EU's efforts to tackle global warming

Around that time, the EU's carbon market was hit by so-called carousel trade in which buyers imported emissions permits without paying VAT and then sold them to each other, adding tax to the price and pocketing the difference.



'The convicted were fraudulently involved in tax-evading trades,' said judge Martin Bach.

'They have brought the carbon market trading scheme into disrepute.'

The EU Emissions Trading System, designed to be a key weapon in the fight against global warming, caps the emissions of factories and power plants, forcing them to buy more carbon permits if needed while also allowing them to sell surpluses.



The way Germany's flagship lender, Deutsche Bank, traded permits with some of the jailed men left the door open for tax evasion, according to the judge.



Deutsche Bank said today that independent legal experts had so far found no wrongdoing on the part of the bank's employees.



Deutsche Bank: The company traded with some of the men jailed today

The Frankfurt court verdict marks the first convictions after an EU-wide investigation into the fraud.



European police agency Europol estimates widespread VAT fraud cost EU member states around €5billion (£4billion) in lost tax revenue.



The judge said Germany became the target of fraudsters in late 2009 after Britain, France, and the Netherlands.



Briton Irfan Musa P. received the maximum sentence of seven years and ten months, while UK-born Wayne Stewart B. and Fraz M. were each jailed for four years.



German Björn P. received a six-year sentence, and his father Robert was sentenced to four years, while Claude B, a Frenchman, will spend three years in prison.



The defendant's full surnames have not been released.



A separate trial in Britain is set to start in February, after seven suspects pleaded not guilty to carousel fraud.

