UK Arrests in Carbon Credit Trading Scam – organized crime said to be involved

From the UK Telegraph:

Seven arrests in suspected £38m carbon credit fraud

CarbonCreditCertificate

Click to get your own certificate, suitable for framing

Seven people have been arrested and 27 residence and office locations were raided by police over a suspected £38 million pounds (62.8 million dollars) fraud involving the trade of carbon credits to avoid paying the value-added tax (VAT) which is required in the UK.

excerpt:

By Rowena Mason

Published: 7:36PM BST 19 Aug 2009

Officers from HM Revenue & Customs searched both residential properties and offices in both Gravesend and London targeting an alleged network of organised crime.

Members are believed to have been trading large volumes of high-value carbon credits from overseas sources free of VAT.

Tax investigators believe these may then have been sold on to businesses in the UK charging VAT that is never paid to the authorities.

Read the complete article here

======================

Is anyone really surprised? a Duke University masters candidate Alan Abramson clearly identified the risk this spring, as have many others:

The [carbon offset] market requires validators and verifiers all over the world. The system is already short personnel with these skills. Then there is the question of who pays these people? Regulators need to keep in mind the failure of the credit rating agencies (Moody’s, S&P, etc.) in the recent credit crisis. Markets require trust. Respondents said the only reason certain investors purchased some MBS assets was the Triple-A rating.42 These same respondents say that a significant flaw in the system exists because the credit rating agencies are paid by the bond issuers. A disincentive exists for doing a thorough job. Currently, validators and verifiers are paid by project developers. If we are to learn from the failings of the financial markets, this is an aspect of the carbon offset markets ripe for misconduct.

See the PDF of his masters thesis here

Advertisements

  Subscribe  
newest oldest most voted
Notify of
INGSOC

So I guess mine are worthless…
Dang.

kim

These small time grifters are almost innocent in comparison with the big time crooks like Al Gore and his cronies. Where are the lawsuits by those damaged by the failure of Lehman, big in the carbon encumbering market and advised by the likes of Gore and Hansen?
==========================================

Gordon Ford

As expected. How do you regulate something that does not exist, a credit for emissions not produced. This may be the scam of the century!
I have a billion for which I paid nothing.

D. King

Shoot! I’ll have to put them with my wooden nickels.

Patrick Davis

What a surprise, didn’t take long did it! Mind you, the VAT man from the Inland Revenue department has more power than the police. Be afraid, be very afraid.

Craigo

At least with a $100 Billion Zimbabwe note you can now buy more than a loaf of bread!
http://www.zimbio.com/Zimbabwe+Issues/articles/157/Zimbabwe+Dollar+notes+sale+eBay

philincalifornia

“The Government took decisive action to prevent this type of fraud recurring by zero rating carbon credits for VAT,”
Translation: Hey, get your hands off OUR fraud !!!

Jimmy Haigh

How is it you say? ‘Smack me down and call me Samantha?’
This is one of the chickens coming home to the roost. AGW is a scam. Scum scam and these are the first to be caught out. Expect more and the more that are caught the more Joe Ordinary Man In The Street Public – like you and me – will catch on.
Ponzi Scheme. Madoff Scheme. Gore Scheme…

Taxing imaginary things. Brilliant!

Dave Wendt

what a surprise!

Hank Hancock

My sense is the whole carbon trading industry is an incestuous lot. Look for rampant carbon trading scams of Enron proportions.
Doesn’t Al Gore own a London based carbon trading company named Generation Investment Management? Pay no attention to the man behind the curtain.

Ed

Hope Al is involved. That’d be Karma for ye!

Ray

I did not want the government to ask me to stop breathing or have a carbon meter installed in my mouth, so I printed a septillion ( i.e. 1,000,000,000,000,000,000,000,000) in carbon credits… thanks internet.

rbateman

All this jumping up and down over faster than we had previously thought is for this? Selling cute green shares for a fast buck.
Flim flammery.
Lehman Bros and Enron move over: the real shock and awe of speculative agenda-based gambling just showed the tip of the iceberg.

Our government recently sold free carbon credits for 5euro/ton to “garage”company created shortly before, which sold it to final buyer (Japan) fro 12 euro. Threads go to one of the ruling parties, which “owns” the environmental ministry.
Now we understand why politicians love this AGW.

Kafkazar Investment Management today announced an initial offering of photon offset instruments. During solar minima (including Dalton minima, if the investor has purchased the optional Ice Age Rider), the credits can be exchanged for additional photons. Conversely, during periods of high solar activity, the photon offsets may be purchased at a bargain rate. This will eliminate Global Warming. NOTE: setting fire to these photon credit certificates is strictly forbidden. Any excess funds will, of course, be transferred to Al Gorf’s Swiss bank account.

Just who are the bigger crooks? HMRC and the Government for taxing something that can’t be measured and doesn’t actually exist except as a nebulous idea in the minds of a bunch of nutters whipping up public hysteria (If I see one more clip of steam issuing from cooling towers presented as “Carbon laden smoke emmissions” I’ll start trying to prosecute someone under the Trade Descriptions Act!) – or the “traders” who sell these certificates to smart businessmen who can then wave them at the Green loonies who believe all this rubbish?
Legislators worldwide do not operate on reality or common sense – just on “how do I get these morons to vote for me next time” and at the moment the bleeding heart Green lobby is a good bet. So are the Carbon Trading Certs for the criminal classes.

crosspatch

As seen somewhere on teh interwebz:

Holiday Credits. Buy yours today!
You know, no matter what holiday we celebrate, be it Kwanzaa or Christmas or Hannukkah or Festivus, we are probably either doing it wrong or don’t have the time or energy to do it completely. At the same time, there are people out there who are celebrating the living (bleep) out of their holiday. So I have an idea to bundle all of this surplus celebration into “Holiday Credits” that you can purchase to ensure that you have the proper amount of celebration accounted for. It removes all guilt from not actually having to celebrate by knowing that you have financed extra celebration by others in your stead. How awesome is that! Don’t have time to mess with that menorah thing? No problem! Your Holiday Credit will go toward buying someone an EXTRA one along with extra candles, too! So you can just go off and do your stuff and not have to be bothered in the least that you didn’t actually take the time to do it, because you can’t, right, because you’re like all busy and stuff. And that is exactly why we are here. We take your holiday tradition and get busy so you can stay busy with the (bleep) that fills your day AND Holiday Credits are 100% GUILT FREE!!! Guaranteed!!!!!!eleven!!!!!!one!!!1!!!
So folks, don’t let the holiday guilt get you down, just get on paypal and send us $99.95 and we will make sure your holiday is properly celebrated and all required rituals performed IN YOUR NAME!
Don’t delay … call today! Call in the next 5 minutes and we will even name THREE stars for you! That’s right, you get guaranteed holiday celebration and THREE STARS, thats a $45 dollar value FREE if you call RIGHT NOW. And as an extra bonus we will throw in 2 carbon credit credits. Carbon credit credits are credits for not buying credits for the energy that you didn’t conserve. Don’t feel guilty about not feeling guilty enough to pay someone else to conserve your energy for you, get 2 FREE carbon credit credits AND three stars when you buy a Family Holiday Credit package, all for only $99.95*!
* Offer not valid in Kansas, Oklahoma, and some streets on the Northeast side of Albuquerque. Offer void where prohibited by law. Some settling of contents may occur during shipment. Stars may appear smaller than actual size. Your mileage may vary. Any use of this play by play without the expressed written consent of Major League Baseball is prohibited.
(c) 2008 – One Sick Puppy, Inc.

Everyone here appears to have missed the point, the scandal is not related to the value or nature of the bonds but that the companies trading them failed to pay tax on them (VAT). That happens with all manner of commodities.

D. King

Jimmy,
I don’t know about you, but I’m thinking Haggis credits.
For every credit purchased one Haggis is set free.

Gene Nemetz

So the Brits have a value-added tax. The idea of a value added-tax is being considered in America. WT#?! Didn’t America originally kick the Brits out over taxes? Now we’re taking on one of their ideas? The car America is shifted into reverse. She needs to put it back in drive.
American VAT story :
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052602909.html

Gene Nemetz

Carbon credits are a commodity. Their price can be manipulated just like any other commodity.
And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits
http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine/7
Video about commodities and the huge potential for out of control pricing :
http://www.rollingstone.com/videos/player/28915225

Gene Nemetz

Regulators need to keep in mind the failure of the credit rating agencies (Moody’s, S&P, etc.) in the recent credit crisis. Markets require trust. Respondents said the only reason certain investors purchased some MBS assets was the Triple-A rating.
Here is a very good documentary about that :
“CNBC Originals – ‘House of Cards’, The Definitive Look At The Origins Of Today’s Global Economic Crisis”
It lays out the case of what happened in America so simply I don’t think anyone could misunderstand.
http://beta.video.msn.com/play/?g=7087777c-2be9-4c22-9b97-7f104553b79b

This is VAT fraud – it’s not related to the environmental value of the carbon credits. It’s not helpful to connect this crime with the value of carbon offsetting.

Dear Sir,
Firstly I must first solicit your confidence in this transaction; this by virtue of its nature as been interly confidential and top secret though know that a transaction of this magnitude will make someone apprehensive and elated but I am assuring you that all will be well at the end of the day. I have decided to contact you due to the urgency of this transaction as we have been reliably informed of you discretness and ability to handle transaction of this nature.
Let me start by introducing myself properly , I am Mr. Henry A. Waxman of the Energy and Commerce Committee and credit offficer with the Carbon Offset Bank of Nigeria Benin branch. I came to know of you in my private search for a reliable and reputable person to handle this confidential transaction, which involves transfering huge sum of money to a foreign account requiring maximum confidence.
The preposition: A foreigner and an American , Mr. Albert Gore, a Carbon Merchant with the federal government of America, banked with us at the Carbon Offset Bank of Nigeria Benin and had a closing balance as at the end of June 2009 worth $351,432,000usd. Valuable effort have been made by this bank to get in you with any of the Gore relative or family have been unsucessful. It is because of the perceived posibility of not been able to locate any of Mr. Albert Gore next of kin (he had no wife or children that is known to us).
The management under the influence of our chairman and members of the board of directors arrangements have been made for the funds to be declared “unclaimed” and subsequently donate the funds to the Cap and Trade trust funds and this will futher enhance the cause of glbol wrming and the world in general.
I now seek your permission to have you stand as the next of kin to the Mr. Albert Gore so that the funds will be released and paid into your account as the beneficiary next of kin, all document and proofs to enable you get this funds will be carefully worked out We have been mandated by the bank to officialy declare the beneficiary within the shortest possible time , that is why we have decided to contact you and more so we are assuring you that you that the business is 100% risk free involvement.
As soon as we receive an acknowledgement of the receipt of this message in acceptance of our mutual business proposal we would furnish you with the necessary modalities and disbursement ratio to suit both parties without any confusion.
If this proposal is acceptable to you do not take due advantage of the trust bestowed on you ,kindly respond immediately with the e-mail address furnishing me with your most confidential telphone, fax number and your exclusive bank account particulars so that we can use this information to apply for the release and subsiquent transfer of funds in your favour.
Thank you in advanced for your anticipated co-operation
Best regards
Mr. Henry A. Waxman, Esq. and Memeber of Congres

P.Wilson

As a maritime society, I reckon we are well placed to establish a cloud cover and water vapour trading scheme. If its true that the lag between c02 is 800 to 2000 years, according to past proxies, then the c02 increase today must be from the warming during the MWP. So the carbon trading scheme is a direct result of past warming.
Given that oceans regulate the climate by 98%, surely thats where they money should be. Then theres a solar trading scheme to consider….

ared

please note that the scheme was NOT in the credits itself, although there’s probably plenty of fraud going on in the offset market as well. But in this case, for all we know, something might actually have been offset somewhere by someone. The fraud was charging customers VAT, not reporting it to HMRS and putting it in their own pockets.
Brilliant solution by the British, BTW. “Well, if you are going to cheat us out of VAT, we’ll just reduce the tax rate to zero. Try cheating us out of our revenue now, suckers!”
Some devious Brits should scheme the revenue service out of income tax. Maybe they’ll abolish income tax as well 🙂

P.Wilson

Addendum. Yes, I’m convinced that this long time lag is due to long term oceanic outgassing from past climatic history. Lets create a tax on those emissions instead.

Alan the Brit

You colonials may call those involved Organised Crime, we back here in blighty proudly call them Politicians & Environmentalists!
Just off down to Staples to get some more ink for by HP printer so that I can print off a quintillion zillion of my own Carbon Credits. Good old “Disney” world! Perhaps they’re all snorting stuff from Afghanistan grown with that fertilizer we Brits send over there that ends up in IEDs that blow up our troops? I won’t go there, honest!
All hail the Beautiful Leader & his drive to STOP climate change.
End of sarcasm, tongue no longer in cheek.

3x2

UK Arrests in Carbon Credit Trading Scam – organized crime said to be involved
Imminent UK General Election then?

tallbloke

Carbon Cred salesmen in pyramid scam fraud bonanza.
I’m shocked. Really.

Carbon Credits are the biggest scam ever invented, and I still cannot see the rationale behind them.
Companies are given CCs free, as a measure of how badly you pollute. Thus the more you pollute now, the more money you can get (good start this, a nice incentive to increase or exaggerate your pollution). You then reduce pollution by installing new equipment, and you can now sell on your CCS to someone else, who can pollute on your behalf.
Since the main polluters are in China, India and Russia, all you have done is transfer money from the West to the East, while the total amount of pollution possible remains the same. How does this reduce pollution?
Check out the Indian CFC scam, that netted Indian companies a $billion or so, for factory upgrades that only cost a couple of hundred million.
http://www.carbontradewatch.org/index.php?option=com_content&task=view&id=294&Itemid=36
As a trading system, this is bound to end in tears as there are too few controls on the issuing and accounting of CCs, and we are dealing with the Third World here. There is every inventive to cheat the system by inventing more CCS, and this will be done to such an extent that the system will collapse under the weight of its own corruption.
.

Alan the Brit

Whilst we’re at it, you know, living in Disney Land, here is this little gem to amuse.
http://news.bbc.co.uk/1/hi/sci/tech/8205864.stm
Yet again, how do they know that this has not always occurred for eons as it “very likely” (95% certainty a’la IPCC) has? They of course don’t dress it up like that as it doesn’t possess that “scarey story” factor! They’ve put the “scare” factor in place, so that they can get the dosh for the next expedition at Taxpayers’ expense! Tongue definitely not in cheek.

>>>Mike D. (00:43:45) :
(The Nigerian Bank of Carbon Credits internet trading scam.)
It took me a while to see what you were driving at here, Mike, but it is actually very good. It sums up the situation nicely.
.

D. King

ared (00:49:07) :
Brilliant solution by the British, BTW. “Well, if you are going to cheat us out of VAT, we’ll just reduce the tax rate to zero. Try cheating us out of our revenue now, suckers!”
LMAO

D. King

Dan (00:38:21) :
This is VAT fraud – it’s not related to the environmental value of the carbon credits. It’s not helpful to connect this crime with the value of carbon offsetting.
Too true, as you buy your carbon offsets and the ppm of CO2 continue
to rise, it will be a completely separate crime.

As others have pointed out, this is VAT fraud, not Carbon Credit fraud. “Missing trader” fraud is a huge problem, due the arcanities of our intrastat EU VAT systems – see
http://en.wikipedia.org/wiki/Missing_trader_fraud
It was traditionally done with RAM and mobile phones, so it really doesn’t have much to do with the real value or otherwise of the commodity being traded; they are simply looking for something high-value and easy to transport.

UK Sceptic

New Labour are going to put a cap (sic) on this VAT fraud very quickly because they aren’t about to let another bunch of crooks muscle in on the biggest scam ever.

Jack Simmons

Training film for carbon credit salesmen:

How did you get a copy of my carbon offset certificate?

VG

OT I know Leif does not like being told he is wrong (just like me BTW). I am surmising but maybe Solar Minimun has not been reached. Its looking very very dead (re sunspots only), so surmising that the solar graph will go down again! (not up). Solar minimum may not have been reached?
http://www.solarcycle24.com/
However, I ain’t a solar scientist and Leif would be much more knowledgeable re Solar than me..

GP

Phil.
Dan
I sympathise with your clarification but the very fact that the ‘scheme’ exists at all means that it invites (at the least) dubious dealings.
That the Government (presumably under EU instruction) wanted to rake in some extra tax from it is pretty much what one would expect. Given that these are business to business trades meaning that the VAT is usually reclaimable anyway as it is passed up the chain, zero the VAT out is simply going to save admin costs. The VAT element is a minor part of the fraud and totally unauditable (for ‘product’) by any normal means.
In the end the entire additional costs incurred by the purchasers of the ‘credits’, plus any VAT that may or may not have been charged, plus a profit margin, will be passed on to the ‘consumers’ one way or another.
The only carbon savings to occur, should that be important, will relate to people being unable to heat (or cool) their homes or cook their food. Those running the trading businesses and heading up the companies will find extra profits and so extra bonuses.
I’m no socialist but all I see here is a transfer of purchasing power from the lower regions of the social pyramid to the upper regions with some syphoning off for wasteful government projects.
As others have written in the responses, this entire concept is so evidently open to corruption and misapplication that only the most loosely moral political leadership could even contemplate promoting it. That politicans in most of the developed world seem to support such schemes says somethinig about the state of 21st century politics in the ‘developed’ world.
I’m surprised that they have not appointed Bernie Madoff to run it. (Hmm, perhaps they have ……)

Damn, and I was just about to corner the Hot Air market. And yes, I pilfered the art, brilliant.

DaveE

Jeff Alberts (22:04:11) :

Taxing imaginary things. Brilliant!

Better than that…
This is a scam avoiding the tax on the tax on imaginary things! 😉
DaveE.

P.Wilson

Given that the vast majority of c02 increase and exchange is natural… Well just think of all the extra revenue if that, too, were brought under carbon trading.
i propose an all round air tax for every individual. Of course, given the lucrative sums involved, it would not be in the interest of traders and revenue collectors to inhibit our consumption and emission of this benign gas.

Skeptic Tank


It’s a sham.
It’s a sham of a sham.
It’s a sham of a sham of a travesty of a mockery of a sham.

– paraphrased from a Woody Allen movie
REPLY: Its SHAMWOW !
– Anthony

Dave Wendt

Phil. (00:04:13) :
Everyone here appears to have missed the point, the scandal is not related to the value or nature of the bonds but that the companies trading them failed to pay tax on them (VAT). That happens with all manner of commodities.
Dan (00:38:21) :
This is VAT fraud – it’s not related to the environmental value of the carbon credits. It’s not helpful to connect this crime with the value of carbon offsetting.
I guess my question would have to be what would be the value added by a carbon offset that would make it subject to a VAT?

RexAlan

Thanks “Mike D” and “Jack Simmons”, absolutely fantastic. This whole Carbon thing has become such a joke it’s unbelievable.

Tracy Giles

Please tell me the Goracle is listed in the arrest warrent.

Curiousgeorge

The black comedy that some have posted on this is very entertaining, but let’s not forget that the reality of Cap&Tax and it’s relatives is to very seriously relieve you and I of our money and our freedoms. Van Jones, Holdren, Hansen, Obama, Gore, et al don’t think it’s one bit funny, and neither should we. This is serious business. Very serious.