Tobacco duty scam lands two with jail terms

Customs officers were alerted after staff at Big Yellow Self Storage in Leeds became suspicious because of the smell from some rented units that they suspected might be cannabis.

They were wrong about the source of the smell but right that something illegal was going on – because the officers found hundreds of cardboard boxes stored in three units which had tobacco sealed inside the soles of many of the shoes.

Inquiries about those renting and attending the units over previous weeks led officers to Zhi Qing Cai’s home in Waincliffe Mount, Beeston, Leeds.

When that was searched Craig Hassall prosecuting told Leeds Crown Court a tobacco repackaging enterprise was discovered in the attic where counterfeit pouches of Golden Virginia and Amber Leaf were filled for onward sale to the illicit tobacco trade.

Cai and Jian Ming Chen, 36, of Grasmere Court, Armley, Leeds were each found guilty by a jury yesterday of fraudulent evasion of duty between December 11, 2009 and April 28 last year. Cai’s wife Liu Hau Zhu, 23, was found not guilty of the same offence.

Jailing the two men, Judge Geoffrey Marson QC said they had been convicted on “overwhelming evidence”.

“This was a highly professional and well organised enterprise and it involved significant and prolonged planning.

“Each of you I am satisfied was very closely involved in that organisation and planning, it involved a vast quantity of tobacco, 9.2 tonnes and the cost to the public purse was in the region of £1.2m.”

He said when Cai learned that his home had been searched and wife arrested he abandoned her to her fate and fled.

He was only arrested months later in Scotland when a taxi he was taking from Leeds was stopped and he was found with 212 kilogrammes of tobacco on which duty should have been paid.

The judge said he was not facing a charge in relation to that but it demonstrated his determination to be involved in the enterprise.

Judge Marson commended staff at the storage units saying without their public spirited actions the matter may never have come to light.

Mr Hassall told the jury it was estimated the repackaged tobacco could have been sold for almost £2m. “This was a big enterprise.”

The first unit had been rented on December 11, 2009 and on January 14 last year an articulated lorry arrived at the depot and because of the number of boxes unloaded from it Cai arranged to rent a second unit.

Staff were even offered flip flops as a gift after the delivery.

Over the following weeks records showed visits were made and a few boxes removed at a time.

On April 26 Cai attended with other men, including Chen, and a further delivery was made from another lorry which was on site five hours.

A third unit was needed to store everything.

The jury was told it was the activity of that day and the smell from the units that led staff to phone a customs hotline to report their suspicions.

Customs officers attended the next day and seized 915 boxes stacked in the three units containing hundreds of pairs of flip flops, many containing tobacco wrapped in plastic in the soles.

That afternoon the repackaging enterprise in the attic at Cai’s home was found.

He was not present at the time but Chen was arrested in his vehicle nearby and found to have similar counterfeit pouches in his glove box.