The fugitive boss of a steel pipe company and his firm were convicted today of a £640,000 tax scam involving the smuggling of cheap Chinese-manufactured parts.
Company director John Sutton, 64, of Cheriton Mill, Cheriton Fitzpaine, Crediton, Devon is now believed to be hiding-out somewhere in Canada.
He told his legal team he "could not face" the Croydon Crown Court trial, which went ahead in his absence and warrant was issued for his arrest.
Sutton will be sentenced on October 21 along with his company Ashby Scott Ltd. of Unit A, Shell Green Estate, Gorsey Lane Industrial Eastate, Widnes and its sales manager Michael Kirk, 42, of Middlecot Close, Orrell, Wigan.
Kirk pleading guilty on day two of the trial to being knowingly concerned in the fraudulent evasion of duty payable on goods said to be from Japan between January 1, 2003 and July 31, 2006 and goods said to be from India between February 1, 2006 and January 31, 2008.
The absent Sutton and the company were convicted unanimously on both counts by the jury after just forty minutes.
The parts were subject to a 58.6% tax - nicknamed 'anti-dumping duty' - imposed to thwart importers unfairly undercutting rivals within the EU.
"It's about smuggling," prosecutor Mr. Julian Christopher QC told the jury at the start of the trial. "Smuggling comes in all shapes and sizes and one type is the smuggling of Chinese pipe fittings."
To protect European manufacturers the European Commission agreed to impose the tax on carbon steel imports from China.
"The country outside the EU is dumping its products at an artificial price into the EU," added the prosecutor.
The court (pictured) was told between 2003 and 2008 Ashby Scott Ltd. avoided over £640,000 duty in relation to thirty-one importation's the defendants claimed had come from Japan and India.
"None of that was paid because the pipe fittings were not sent directly from China, but from Japan and later from India," added Mr. Christopher. "The anti-dumping duty ought to have been paid.
"You will have to decide whether either defendant knew they were Chinese or thought they were from Japan or India," he told the jury. "The prosecution say they knew full well they were Chinese."
The parts were bought from APCO a Chinese/British venture involving a UK company called TFF International - of which Sutton was the managing director and nominated legal representative.
His company had invested $150,000 US into APCO and the Chinese $350,000 US and TFF agreed to handle all the marketing and imports and exports.
Kirk provided the documentation for Customs clearance with the full knowledge of Sutton, the prosecution allege.
"Through them the company was operating and through them it was importing pipe-fittings and dealing with shipping agents," added Mr. Christopher.
The parts were shipped from Dalian, China to Osaka, Japan then immediately re-shipped to Felixstowe and delivered to Ashby Scott Ltd.
"In every case the seal number for the first part of the journey was the same as the seal number for the second part of the journey from Japan to the UK. That shows there cannot be any manufacturing in Japan."
Regarding Kirk Mr. Christopher added: "We will see him dealing with the purchase orders. The prosecution say the email communications show he was dealing with China and not the supposed manufacturer in Japan."
The paperwork he prepared even tried to show the shipping containers were packed in Japan by Gosei Industries.
"That is all part of the smuggling, all part of the fraud."
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