Reay, 46, of Grimoldby in Lincolnshire, admitted misdescribing the watches as low-value ‘precision instruments’ – enabling him to pay import VAT of just £7,805 during a 4-year fraud uncovered by HM Revenue and Customs (HMRC).
The fraudster traded online via eBay as Darren Reay Watches and also as IOW Sales Ltd from Wight’s Watches at 35 High Street, Cowes. He used the money to fund a lavish lifestyle of luxury properties, cars and designer watches.
The investigation began after business records, including diaries, invoices, and shipping and courier documents, were examined as part of an HMRC compliance visit to Wight’s Watches in March 2014. Documents showed insurance of $25,000 was taken out on shipments with declared import values of between $50 and $100.
HMRC investigations revealed that over 520 packages had been imported from 1 retailer in New Jersey, United States, with £6.3 million being paid out by money transfer in the same period.
Reay told investigators these watches were imported to order and he would receive commission. The offences took place between March 2011 and March 2015.
Reay is also known to have had business links to Gibraltar where he is known to have traded online as watches.es through his business KJO Ltd. He also traded online from the UK as Watch Dealer Ltd between March 2011 and August 2013.
At Teesside Crown Court yesterday (Thursday), Darren Reay admitted the fraudulent evasion of VAT totalling £1,252,948.20 and was jailed for 3 years.
Over 800 watches were seized during a search of Reay’s then-home in Chilton Moor, Houghton-le-Spring, in March 2015. His Honour Judge Armstrong ordered that the watches be sold and the proceeds paid to HMRC.
“Reay blatantly lied to steal £1.25m from the UK public. His crimes were driven by pure greed to fund a luxury lifestyle he couldn’t afford. We will ensure honest, hardworking businesses do not suffer from being undercut by fraudsters like Reay.
“HMRC will continue to pursue those criminals who attack the tax system. We ask anyone with information about suspected VAT fraud to contact our 24-hour Hotline on 0800 59 5000 and help us stamp it out.”