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Ringleaders of tobacco smuggling gang behind bars

Cigarettes and AC adaptors (top right)

[T]he ringleaders of a tobacco smuggling gang, who hid illicit cigarettes in lighting units and laptop adapters in an attempt to smuggle them into the UK through the post, have been jailed for a total of 76 months.

Guo Shan Zhang, 34, and his serial offending accomplice, Shan Jing Su, 31, led the nine-strong gang in smuggling non-duty paid tobacco products from China, Singapore and Hong Kong.

The pair arranged for parcels containing the hidden cigarettes and hand rolling tobacco to be sent to addresses across the North East where they would be collected from their accomplices.

HM Revenue and Customs uncovered the fraud after approximately 500 parcels containing more than 1.8 million cigarettes and 100kg of hand rolling tobacco worth an excise duty loss of £472,452 were stopped as they entered the UK.

Denis Kerr, Assistant Director, Fraud Investigation Service, HMRC, said: “This was a brazen and sustained attack on the UK taxpayer by a highly organised criminal gang. Zhang and Su thought they had come up with a clever way to beat the system – they were very wrong.

“Disrupting criminal trade is at the heart of our strategy to clamp down on the illicit tobacco market, which costs the taxpayer around £2 billion a year. We will not allow hardworking, honest retailers to be harmed by criminal gangs selling illegal goods and we are determined to ensure there is a level playing field. I encourage anyone with information on this type of fraud to contact our Fraud Hotline on 0800 788 887.”

Today, Zhang and Su, were handed jail sentences of 36 months and 40 months respectively for conspiracy to evade excise duty.

Their fellow gang members were also convicted of conspiracy to evade excise duty and they were:

  • Keith Peacock, 63, sentenced to 16 months in prison, suspended for 24 months
  • Kwai Chan, 53, sentenced to 12 months in prison, suspended for 24 months, and 200 hours unpaid work
  • Harry Marwick, 47, sentenced to 10 months in prison, suspended for 24 months, 200 hours unpaid work and 20 days rehabilitation.
  • Min Gao, 34, sentenced to 6 months in prison, suspended for 24 months, and 200 hours unpaid work
  • Trevor Walker, 59, sentenced to 6 months in prison, suspended for 18 months
  • Lewis Zalick, 22, sentence to 14 weeks in prison, suspended for 18 months, and 200 hours unpaid work
  • Joseph Dukes, 50, was jailed for 18 months for his involvement in the conspiracy and similar related offences.

Chinese takeaway owner Zhang organised for the parcels to be delivered to the gang members’ homes in the North East and County Durham.

The packages were often mis-described as green tea, children’s toys and clothes. In some instances large quantities of cigarettes and tobacco were hidden in LED lighting units, which had been sealed shut, and single packets were even hidden inside laptop adaptors.

HMRC investigators found Zalick, Gao, Walker, Chan, Peacock, Marwick and Dukes were paid between £20 and £50 for each delivery.

Zhang’s kingpin status was confirmed by phone evidence linking him to his co-conspirators, showing he was in charge of the smuggling operation.

His right-hand man Su, a former employee at the takeaway, collected the parcels from the gang members’ homes. He was arrested after 200,000 illicit cigarettes sent to his Brandon home were intercepted in May 2015. Investigators found parcel labels from packages sent to other gang members at his home.

Despite being arrested and under a suspended prison sentence for money laundering, Su used a false identity to rent various addresses in Middlesbrough and had packages sent to them. Dukes and Peacock helped him collect the packages.

Su was arrested again after Cleveland Police found 44,000 cigarettes in the vehicle he was driving in July 2015. He was then seen waiting for the delivery of 400,000 cigarettes in Middlesbrough, which had already been identified by UK Border Force in October 2015.

Zhang and Su both admitted evasion of excise duty at Newcastle Crown Court on 24 April 2017 and were each sentenced at the same court on 25 September 2017.

Peacock, Chan, Marwick, Gao, Walker, Zalick and Dukes, admitted the same offence at Newcastle Crown Court.

Confiscation proceedings are now underway to recover the stolen money.

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