A couple from Manchester have been jailed for a £3.8 million excise fraud, involving over 25 tonnes of counterfeit tobacco, after an investigation by HM Revenue and Customs (HMRC).

Feng Gao, 39, and his partner Mingshu Yang, 43, of St Heliers Drive, Salford, were linked to over 28 deliveries of illegal hand-rolling tobacco (HRT) across the North West and eight tobacco seizures in Manchester, Liverpool and the Netherlands.

The pair used ‘cover loads’ of shoes and shelves to smuggle the tobacco into the UK. Some of the shoe soles and shelf units were hollowed out to hide the illegal tobacco. During searches in Manchester and Liverpool, HMRC seized thousands of empty counterfeit HRT packages and a tobacco processing machine.

Sandra Smith, Assistant Director, Criminal Investigation, HMRC, said:

“Disrupting criminal trade is at the heart of our strategy to clampdown on the illicit tobacco market, which costs the UK around £2.1 billion a year. This is theft from the taxpayer, denying public services much needed money, as well as undermining legitimate traders. We urge anyone with information about any other commercial trading of smuggled goods and the associated tax evasion to contact HMRC on 0800 59 5000.”

HMRC officers originally arrested Gao in May 2013 outside a property on Teck Street, Liverpool, with over 100,500 fake tobacco packages in his possession.

The couple’s home in Salford was searched and investigators found the back garden strewn with debris from the smuggled loads and the garden shed full of boxes of illegal tobacco and fake packaging. Other evidence linked Gao to storage units in Liverpool and Salford.

In 2012, these storage units had been searched by HMRC and UK Border Force (UKBA) officers and were found to contain large quantities of fake tobacco pouches and illegal HRT. In addition, Dutch customs officials had intercepted a large consignment of similar goods hidden in floating shelf units destined for one of these sites. The investigators were able to link all these earlier seizures to Gao and Yang.

Gao and Yang pleaded guilty to UK Excise Duty evasion and fraud offences in March 2015. At their original sentencing in April, Gao failed to attend leaving his partner, Yang, to face the charges alone. The hearing was adjourned until 26 May and a bench warrant for Gao’s arrest was issued. Once again Gao failed to appear, and this week he was sentenced in his absence to five years jail. Yang was jailed for nine months.

Anyone with information about the whereabouts of Gao, please contact either HMRC, the police or Crimestoppers.

Notes to Editors

1.Feng Gao, DOB 23/07/75, of St Heliers Drive, Salford, Manchester, pleaded guilty to being knowingly concerned in the fraudulent evasion of excise duty contrary to Section 170 (2) of the Customs and Excise Management Act 1979 on 23 March 2015. He was sentenced to five years in jail on 26 May 2015 at Manchester Crown Court.

2.Mingshu Yang, DOB 11/10/71, of St Heliers Drive, Salford, Manchester, pleaded guilty to offences in relation to possessing articles to be used in fraud contrary to the Fraud Act 2006 on 23 March 2015. She was sentenced to nine months in jail on 26 May 2015 at Manchester Crown Court.

3.Details of seizures:

-Gao rented a storage unit in Salford where, on 14 June 2012, 108,800 fake Cutters Choice HRT empty packs and 154.5 kilos of illegal tobacco were seized by HMRC and UKBA officers. Valued at £892,758 in evaded UK Excise Duty.

-On 6 November 2012, Dutch customs seized 300 kilos of loose tobacco from a consignment of floating wall shelves in the Netherlands. The tobacco was destined for a self-storage unit on Mill Lane, Liverpool that Gao rented.

-In response to the Dutch seizure, HMRC and UKBA officers raided the storage unit on Mill Lane, Liverpool, on 7 November 2012, where 88,000 fake HRT packs and 300 kilos of illegal tobacco were seized. Valued at £722,084 in evaded UK Excise Duty. The unit was rented by Gao (using Yang’s debit card).

-Gao was arrested receiving a delivery at premises on Teck Street, Liverpool, on 30 May 2013. HMRC officers seized boxes containing 100,050 empty packets bearing fake markings for Golden Virginia HRT in his possession. Valued at £864,131 in evaded UK Excise Duty.

-On 30 May 2013 at the couple’s home at St Heliers Drive, Salford, HMRC officers seized 152,100 counterfeit HRT packs for Original Virginia, Golden Virginia and Amber Leaf brands and 560 kilos of illegal HRT. Valued at £1,313,687 in evaded UK Excise Duty. HMRC officers also seized a large number of seals and plastic packets for making the counterfeit tobacco packets look legitimate. Some of the boxes held tobacco in foot-shaped packages made to fit inside a shoe. The garden shed was full of boxes of illegal HRT and further fake packaging. The back garden was also strewn with debris from smuggled loads including hollowed out shelf units and shoes with hollowed out soles.

-During the search HMRC officers also found multiple phones, SIM cards and computers, which linked Gao and Yang to a further 28 deliveries and seizures. The deliveries, a combined weight of 9,778 kilos of HRT, were made via a range of legitimate couriers to various addresses across the North West region.

-Eight of the above seizures of illegal HRT equated to a total packaged weight of 25.435 tonnes.

-In total the importation of illicit tobacco and counterfeit tobacco packaging linked to Gao and Yang is valued at £3,792,661 in UK Excise Duty evasion.

4.Follow HMRC Press Office on Twitter @HMRCpressoffice

5.HMRC's Flickr channel: www.flickr.com/hmrcgovuk