VAT Fraud Mutation, Part 1 : 'Push' Missing Trade Fraud and Dosanjh

This three-part paper considers three MTIC fraud cases in CO2 permits, the Dosanjh, CITIBank, and Deutsche Bank cases. Dosanjh was convicted of stealing £39m from January 20 through May 6, 2009, CITIBank is presently responding to allegations that it improperly claimed £9,893,821 in input deductions in July 2009, and the Deutsche Bank is allegedly involved in a €220 million fraud based on improper deductions claimed from September 2009 through February 2010. These papers place these cases on a continuum. The overall intent is to contrast a classic push-type MTIC fraud represented by the Dosanjh case with a pull-type MTIC fraud represented by the Deutsche Bank case. CITIBank is a transitional case. These three UK-centric cases stretch for 14 months, from the beginning of 2009 into early 2010. They highlight a transition in the structure of MTIC fraud as it moved from the criminal periphery (Dosanjh) into the heart of institutional commerce (Deutsche Bank). It highlights the need for sophisticated (technology-intensive) internal controls within the largest commercial players in global markets, and the need for comparably sophisticated government oversight of these markets and players. This paper recommends a policy change. It recommends sophisticated, technology-intensive internal and external controls of the market (in the long-term) to pre-empt the need for Draconian criminal enforcement measures. But it also recognizes that if these measures are deemed necessary (in the short-term) then enforcement needs to adjust its focus when the facts of the case suggest that the fraud is a pull-type MTIC (Deutsche Bank) instead of the traditional push-type MTIC (Dosanjh)