Ukrainian illegal immigrants lived life of luxury after conning HMRC into paying out £4.5million in tax rebate scam

A gang of Ukrainian illegal immigrants enjoyed a lavish lifestyle of expensive cars and luxury apartments after swindling £4.5million from the tax office by using false identities to claim tax rebates.

A court was told the fraudsters found the streets of London were 'paved with gold' after successfully claiming back millions of pounds through false applications.

A judge criticised the ease at which the gang was able to dupe HM Revenue and Customs by using 'flawless' identity documents and setting up bogus bogus firms to appear as employers on the doctored self assessment forms.

Elaborate fraud: Members of a gang of Ukrainian conmen enjoy the spoils of their luxury lifestyle, which was funded through a £4.5million tax con

In each case, the gang made it appear as if the applicants had paid too much tax, and were owed a rebate.

The fraud was so convincing that Revenue officials were duped into paying out more than £4.5million, out of total applications for more than £8million.

Eleven members of the gang were sentenced to a total of 42 years and 10 months at Southwark Crown Court on Friday for conspiracy to cheat the Revenue.

By the time the con was uncovered last year the gang had spent a fortune on top-of-the-range cars, luxury apartments, weapons and lavish parties.

Judge Christopher Hardy, criticised the ease with which the defendants were able to obtain money.

He said: 'The prosecution has said the system was based on trust. Sadly, however, trust has become a very risky and unwise basis in this day and age to disperse millions of pounds of public money.

'It must have seemed to you as if truly the streets of London were paved with gold.'  

Life of luxury: The illegal immigrants enjoyed lavish parties in London after using false identities to claim millions of pounds in tax rebates

He added that while the scam was not sophisticated 'you made up for it with the relentless determination and efficiency with which you went about relieving the British taxpayer of this money.' 

The mastermind of the fraud, Ukrainian Volodymyr Panchak, 27, received a sentence of six years and one month.

His cousin Roman Panchak, 32, and Yuriy Brovarsky, 26, received five years each; Olegs Parkov, 35, was jailed for four-and-a-half years; Krzysztof Giers, 32, Olesya Kovbasa, 28, and Oleg Zdyshcuhuk, 23, four years apiece; Marek Pic, 25, three years and nine months; Marek Krinicki, 25, three years, and Andrey Klym, 26 and Andrey Babukh, 31, each received a year and nine months.

Another man, Vitalijuis Kostrominas, is on the run after he leapt from a fourth floor balcony and ran away when police tried to arrest him at a flat in Brentford.

Scam: HMRC officers found fake bank cards, guns, swords and cash when they swooped on the gang's properties in Brentford last year

Prosecutor Rosina Cottage told the court that Panchak and his henchmen took advantage of the system which allows self employed workers to claim money back if they have paid too much income tax.

Over a three year period between June 2006 and July last year, they created 1200 false identities and set up 600 bank accounts into which the rebates were paid.

Applications were made online through the HMRC website.

All of the defendants had either entered the country illegally, or had overstayed after their visas expired.

Panchak was arrested in March last year, and police followed up with raids on various West London addresses, seizing notebooks full of names and details of individuals, as well as £361,000 in cash.

Scores of false identity documents and driving license applications were also uncovered.

Miss Cottage said the gang members bought the identities of real people who resembled them physically, before applying for new photocards with 'up-to-date' photographs of themselves.

'They used the DVLA to create perfect, untraceable identity documents for themselves', she said.

The fraudsters used their ill-gotten gains to lead a lavish lifestyle, blowing thousands on brand new Range Rovers and BMWs, and enjoying days out skydiving together.

The court heard Panchak's ultimate aim was to run an ongoing fraud at arm's length from an operating base in the Ukraine.