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This company has dumped into PR's since its been at a buck over a year ago.....if any of you concerned holders of this stock care to scroll back thru my post you'll see where I've done an analysis that proves it......I've watch this scam for more than a year and still find myself in awe anyone backing this or any other entity linked to this organization......what happened to the divi?
does anyone care?
out of all the scams I've seen this one is the most well thought out......PR..... pump..... dump, repeat, repeat and repeat......then go dormat for a while new Ihub Mod's because the old ones ( Bloodlees ) finally figured it out... and the cycle starts again PR....pump....dump repeat and repeat....AEGY is now at sub penny from a $1.50, some people over on that board must be sick to their stomach with no HOTI cure.....
and oh ya good luck contacting them for answers, like financials filings.....just stay tune for the next PR....pump dump....and finally raise the AS to a billion reverse split......we need flavour Fla copying more text from PR and posting every two minutes....those really did a lot of good
DollarFan.....Ummmm Google map thier address below.....its a pile of dirt on a vacant lot.....now I have to give HOTI credit, because a pile of dirt is more real assets or the first real assets I've seen this company attain to date....we're on our way boys!!!!!!
AEGY is now sub penny from the 50-1 reverse split witch was $ 50 per share over a year ago.....
1625 East Jefferson Boulevard
Mishawaka, IN 46545
So in their public filings they state on Jan 3rd 139 million shares OS after the PR its now 306 million....
the float was 77 million now 243 million!!!
Comments?
Period end date: December 31, 2010
(ii) Number of shares authorized: 500,000,000
(iii) Number of shares outstanding: 139,991,303
(iv) Freely tradable shares (public float): 77,357,135
(v) Total number of beneficial shareholders: 125
(vi) Total number of shareholders of record: 32
SKTO
Share Structure
Market Value1 $1,532,682 a/o Jan 18, 2011
Shares Outstanding 306,536,303 a/o Jan 14, 2011
Float ................... 243,902,135 a/o Jan 14, 2011
Authorized Shares 500,000,000 a/o Jan 14, 201
Doc, read the press releases from the last year, thats if you have nothing better to do....this company is a press release machine and none have come to be....now ask yourself this question....If this company has released 15 to 20 press releases with outrages content and none have come to be, should I trust the share count published or the latest release for that matter? The one press release you hope doesnt come true is the one with a 300-1 share reverse split....but judging from the other affiliated companies ( AEGY ) it probably will....The poor Souls who purchased that share 10 months ago must be sick to their stomach.....I do have a tainted view and am sick and tired of watching good people loose their money....so there you have it...
Ummmm Dollarfan, I see you've only post on skto and aegy....you started Aegy when it $14 per share now its .63 cents and heading lower....keep up the good work
Ummmm medwah!!!!! look up way up above your post and read the the press releases.....you will read 12 press releases......not one has come true.....
your in luck the nay-sayers are still here.....I see that you have 10 post all in skto....you started back in May so your probably losing your shirt right now....good luck with trying to pump the share price your going to need it
Slim Dude.....
your obvious a new commer.....you need to do your DD and read the 100 press releases of promise after promise and not one comes true....now I see the AS is 500 million, I caution everyone here to go back and read the press releases.....again not one has come to be.....good luck.....Bloodless and I have had of disagreements in the past but you all need to heed his advice...
Unhappy ( just kidding ), I found Henry jan on Linkedin site he even has a picture of himself, maybe you could use that forum to voice your un-happy mario-ness...
Happy New year to you and your family and all should learn from this scam and not make the same mistake next year or fore ever fro that matter...I have given up on all pinks....I now focus on the TSE venture, gold oil and REE juniors....seems to be the old dot.com days of 10 years ago
This article came out Nov 1st 2010, not saying it pertains to the TCLL court case it just explains what happen to a lot of shady mobile phone companies.
Not hearing anything from TCLL management leads me to believe that where's there's smoke there's fire.
It seems they ran for the hills and left us with an emty shell or we would of had some communication after the last 8k which talked about the legal team that was going to fight for TCLL.
IMO
Missing Trader Intra Community Fraud (VAT Carousel Fraud)
Value Added Tax or VAT as it is more commonly referred to is an indirect taxation of the goods and services that we all have to buy. As a percentage of the sales value, some 17.5% in the UK rising to 20% in 2011, it represents many billions of revenue for the tax authorities. Yet in recent years it has been a prime target for the fraudsters. As with any fraud, it is not possible to say exactly how much revenue is being lost at any particular time, certainly the authorities are loath to admit the full extent of the amounts stolen from them. Some commentators put the losses to the European economy in the range of several hundred billion pounds every year – yes a multiple of £100,000,000,000!
There has been much written on the subject of VAT fraud, particularly Missing Trader Intra Community fraud – but what is it? Put simply, it is an opportunity for fraudsters to claim back fictitious VAT from the authorities. The system of VAT involves a trader charging VAT to customers that they sell to. Those customers in turn charge VAT to their customers, while offsetting this with the VAT they pay to suppliers. Thus, the tax is on the profit element of a trade.
The problem arises at the start and end of any chain of trading activities – and is a result of the concessions that arise within the European Community that remove the need for VAT obligations to arise between member states. A fraudster can exploit the system in the following way:
A company in Spain has a batch of goods to sell – these are sold to an importer in the UK. The UK importer sells the goods to another UK company who then re-exports the goods to Hong Kong. The UK importer buys the goods from Europe free of VAT. He adds VAT within the UK to his invoice when he sells to the next UK company. The second UK company must pay this VAT to the importer. The second UK company now re-exports the goods free of VAT abroad – either to Europe or the rest of the world.
If this series of transactions was legitimate, the VAT charged by the importer to the second UK company would be paid over to HMRC. The second UK company would then reclaim this VAT back itself. These would be the only two VAT transactions and they would cancel each other out as far as the authorities are concerned. Because the goods were imported then exported, there would be no net VAT benefit to the UK authorities who are only collecting the tax on the basis that it is on the goods and services that are used within the UK.
However, if the importer defaults on paying the tax – by disappearing or becoming insolvent – yet the second UK company still collects the tax it has paid to the importer, the UK tax system will be out of pocket. This is at its simplest how MTIC frauds work. In practice, the goods may go through a chain of many buffer traders within the UK, or the goods may be fictitious in the first place. There are many more complex variations on the fraud, which essentially targets the huge amounts of VAT that are payable on goods and services.
Mark Jenner & Co has experience in dealing with MTIC VAT frauds for both the fraud regulators, for companies targeted by HMRC for extended verification procedures and for white collar crimes being prosecuted for the fraud. The problem seems to have been that the fraud was very easy to commit on a vast scale. Fraudsters realised that if they claimed some fictitious VAT they could get away with it and developed various different schemes for doing so. Then they realised that there was little need for any effort – simply make the fictitious transactions bigger!
The classic badges of MTIC fraud seem to be a small company that within a year or so is turning over many £millions. During an enquiry for Companies Investigation Branch recently it could be seen that the target company was trading with various other companies that showed this phenomenal growth – for example a company set up in one year had a turnover of £50,000. The next year the turnover reached £1,200,000 and the following year £13,500,000. It is very unlikely that any company could show this sort of growth naturally – but if you are fabricating the invoices, why not? Many companies investigated by HMRC for VAT fraud that were supposedly turning over many £tens of millions each month turned out to be nothing but a computer in the culprit’s bedroom!
The problem that HMRC had during the early part of the decade – i.e. around 2000 to 2006, was that there was a massive growth in the mobile phone business. MTIC fraudsters like mobile phones because they are small and valuable – and can be traded without warehouses and other serious logistics. Within the “official” trade between manufacturers and approved distributors, a substantial “grey” market in phones also grew. This was a legitimate business in itself, but was quickly exploited by the fraudsters until the size of the “grey industry” was apparently bigger than the total global trade of mobile phones altogether. When HMRC realised how big their losses probably were, with typical traders claiming back £10/£20 millions and more each month in recoverable VAT, in 2005 and 2006, they simply stopped any repayments pending “extended verification enquiries”. This probably meant that a number of legitimate traders suffered, but the fraudsters were in a position whereby they could not trade any more until they had been properly investigated by HMRC. These investigations turned into criminal enquiries in many cases, and the UK courts are still seeing prosecutions dating back to this time being processed.
The authorities attempted to curb abuse of VAT fraud in this way by reversing the VAT charge on certain goods. This means that the buyer not the seller pays the VAT on the trade of typical MTIC goods such as mobile phones and computer parts. HMRC’s information sheet VAT 08/07 provides information regarding the payment of VAT in relation to these products. The trouble was that the tenacious fraudster simply switched his attention to different goods, that still were accounted for in the old way – these could include any goods that are traded – but in order to build up big profits, the VAT thieves always will look at high value easily moved items that can be dealt with without the need for substantial business infrastructures – certain pharmaceuticals/cosmetics, spectacles and associated products, high value spirits and even trading in carbon credits have all been targeted by the fraudsters, together with any other product that can be traded and exported – including clothing, furniture, household products, fabrics etc etc.
The only secure solution would appear to be a complete change in the VAT system.
Can someone weigh into this statement in bold. It seems that IFXY paid 750,000,000 million shares for the merger which would make the O/S 936,000,000 or am I not understanding what this means?
On the Closing Date Infrax delivered pursuant to this Agreement, 2,500,000 IFXY preferred series B shares, par value $.001 per share, with a value of $4.00 per share, with a conversion of 300 shares of common shares for every 1 share of Preferred Series B shares issued and held to TRIMAX or subsequently held by another person. Such rights are established with the transfer agent and with the State of Nevada. The conversion of the preferred shares is subject to the terms of the Lock Up and Leak Out Agreement.
225000 shares for me
Does any one know have any further info?
Ya, here (hear) ya go.....go back a year and read the PR's....this company has done nothing but issued PR's that never and I mean never have come to a actual deal......they have continually issued pie in the sky news releases with no follow up or actually turned into sales.....you seem like a "johnny come Lately" do yourself a favour......run....how this is a cent and a half is beyond understanding....the last quarter was a joke ( however I give the credit for telling the truth), they stated in the spring they sold 4 million to a central america port......yep another lie....good luck and don't pump this
If you google HOTI and click skto this is whats listed( see below) as their companies....Google map Angels of the Valley Hospice Care 2490 Honolulu Avenue, Montrose, CA, United States? - (818) 542-3070? a intersection nothing more, you people need to wake up, google all of their so called assets there either residential houses or nothing at all....where are the 15 medical facilities they boasted at one time, they where all to be under SKTO.....what happened to them
Angels of the Valley Hospice Care?Angels of the Valley provides hospice care to individuals who have been diagnosed with life-limiting illness and prefer to decline aggressive treatment. Through its many programs Angels of the Valley provides individualized, loving palliative care to meet the many needs of patients and their loved ones. To accommodate the combination of medical, physical, emotional, and spiritual needs, a handpicked care team assigned to each patient provides personal attention in a comfortable living environment.
Angels of the Valley believes in providing its clients with a high quality of life. To that end, we offer services including: provision of medications and medical equipment as needed; highly trained staff across the board of healthcare services including skilled nurses, physicians, and home health aides; spiritual support for patient and family through chaplains; and a number of additional services.
Email: info@sk3groupinc.com
Website: http://www.angelsofthevalley.com
Medical Billing Specialists Medical Billing Specialist, Inc.
Medical Billing Specialist, Inc. is a comprehensive billing service provider that offers medical offices and other healthcare businesses with billing, reporting, and consulting services. The company has specialized experience in billing services for hospice, home health agencies, and more. Founded by executives with experience running healthcare businesses, the company brings unique insight into the billing needs of busy offices. Medical Billing Specialist, Inc. offers on-location or offsite services, as required by the practice.
Happy, I really feel bad for you because God only knows I've done the same thing.....what do you take away from this is a lesson (albeit an expensive one ) and a reminder to yourselve is to ask questions, listen to nobody and research. As pinksheets stock goes people ( investors and con artist )make millions from them, most are worthless companies... I've watch some companies ( GIOG ) go from .0005 to 6 cents for what....the company said over and over they would eventually sell 100k/month.....some investors made millions of that one....I'm still learning and will never stop but I do have wip marks on my back and I've made and lost huge somes of money.....back in the dot com days was a licence to print money.....2 years ago when the junior bio's got beaten to pennies all you needed to do was watch for FDA dates buy a few days before and you made a killing....
get up wipe the dirt off your knee's and on to the next one.....goodluck
Can anyone fill me in on the missing parts?
No one can. If this company was indeed worth what Henry Jan ( who even knows if this person exist know one can talk to him ) says it is, they would have made a office at one of these claimed assets. Now I see this entity has aquired USST, another low float high AS( Billion) share company. Just like gagi, Aegy and SKTO your going to see pr after pr and dilution, as with all other companies lots of people will get burned or maybe people will see whats going on and not fall for this again.
Good luck on your search I've tried to find information and nothing...Google "Health care of today IPO" start reading then google earth the address they used to do the IPO, its a Post office box, you can start your dd with that, it gets worse after that....
What's happening is a contiual cycle of aquire news dilute, then move on to the next and the cycle will start again
Watch USST
RUN!!!
I cannot post on private, sorry
Geeesshhh!!!!!
I hope some of you dumped at the last run up.....Happy, I will not tell you how to invest because you definitely have done better than me. I wish I had enuff MAD money to risk on a investment like this and continue to invest.....however, if your sincere in your post, of continually buying more shares, then calling Henry a scam artist, man what gives..... WHAT IS YOUR AGENDA HERE.....I am moving out of pink sheets stocks due utter scams like this and others , yet i find myself intrigued with the people that support this......so many have signed up to ihub for the first time just to support this post office box....my friend BLoODLESS and I have battled since GAGI and has ( Bloodless) admitted finally it was a scam..... now I see a person ( Bloodless) so committed to this post office box using words as possible scam....Where's FORD29 last post was 5/29......cashed out and gone....around the same time they annouced the float was 150 million shares.....Henry drives a FORD29 t-bucket raodster that you paid for.....I will say again, you can't go to the head office and complain because it don't exist.....Regenetech is gone, that would mean biomolecules, cure for diabetes, etc gone. That could cause major price drop Monday. Bloodless, can you find what is going on and report before Monday? please for the love of GOD, why has no else in the world have heard about these cures......ASK YOURSELF
www.monckton.com/docs/library/MOBILXODJUNE2010.pdf
test
So, I'm a Troll now...You started on this board 4/21 when the stock was 5 cents and your post was watch for a bounce from here....we are now at .0022 cents....I've watched people see their money go into the toilet all the while you keep praising this companies actions.....noticed how the PR's dried up on SKTO....its because the AS is gone they're not selling into the PR's anymore unless they increase the float......look at yourself in the mirror
Part 2
...the part you should actually care about
SKTO Outstanding Shares: 29,991,303
SKTO Authorized Shares: 30,000,000
SKTO Float: 21,702,504
Source: http://www.otcmarkets.com/pink/quote/quote.jsp?symbol=skto
So what does this mean? This means that SKTO does not have any (ok, very little) more shares to add to the "float". Therefore, the company is unable to issue any more shares without taking a shareholder vote. If a company was able to issue more shares, this would result in dilution, which basically means the same number of shares at a given price, thus reducing the value of each individual share. Since dilution is not possible for SKTO without a shareholder vote, we can be assured that increases in income, (by means of acquisitions, for example) will be directly reflected in the value of each share.
Summary: More acquisitions = more income, possibly more debt, depending on the details of the purchase agreement. If income>debt, then EPS+. If EPS+, share price+. SKTO has all of these lined up, according to the PR's made by Healthcare of Today. Make sense
This stock will not be a penny stock once the name change happens, its doing a 300 to 1 reverse split. Which means it will be .66 cents at todays price with a total float of 500k. The question still remains what assets fall under the new shell, and don't tell me to call because your not going to get an answer. Your going to own a shell at 66 cents then dilution...why is this .0022 cents because just about everyone has figured this out except a few.....I'd tell you to go to their facilities and demand answers but oh ya there arn't any.....
That guy's name is Henry Jan.....he needs the money for his travelling office....this is so nobody can find him
Happy, don't worry about zero, when it gets to .001 a bunch of people on this board are going to buy a ga-zillion shares, your golden
Time to Issue Rules Regarding Corporate Authorized Share Structure Changes
Staff Reporter
Last Updated: July 01, 2010 - 4:35pm EST NEW YORK--Over the past several years liquidity in Pink Sheet stocks have increased dramatically, but so has the issue of investors being caught flat-footed from secret share structure changes in the dark of night.
Pink Sheet stocks, once the realm of illiquid non-trading securities, have grown over the past several years, and now trade millions of dollars in trading each day. But, as many investors who may have invested in such securities know, the ability for companies to raise corporate structures without any due notice to the market has left many investors out in the dark when it comes to these events.
To be fair from the start, we are not discussing the event of companies issuing shares by increasing their shares outstanding, but rather the more devastating move of the increase of ones corporate shares authorized. Many companies from the NYSE down to the pink sheets issue shares for many different reason, such as to investors to raise capital, or to new companies for acquisitions, or for services such as legal, promotion, or such things as website development or employees.
These events are very understandable as this feature is in a sense the heart of our capitalist system, and many investors understand shares are issued from day-to-day for many different reasons. What is more disturbing, and has been more of a dramatic effect on investors who invest in these securities, is the flagrant change in companies corporate shares authorized.
It seems to be all too easy for companies to raise their authorized shares under the cover of darkness, leaving many small investors on the stake when these moves develop into sudden and dramatic share increases in the open market.
Not that corporate authorized share increases should be banned, but their should be new rules regarding companies ability to raise shares authorized, and how the general market must be informed when these events happen. Given these are pink sheet securities, and have very little overview from regulators such as FINRA or the SEC, there could still be rules on the state levels that limit these companies on their surprise issuance of shares on the average small investors.
Maybe such rules as all companies must publicly disclose any increase in shares authorized on Pink Sheets, LCC website, local newspapers in the states they are incorporated, or public press releases say 72 hours before becoming effective.
Another wise rule would be to limit corporations ability to raise their authorized shares to say no more then 200% annually. If a company has say 1 billion authorized, there really should be no reason for them to increase their shares to more then 3 billion, unless without a public shareholder vote and approval.
If say from acquisition, or financing reasons, companies still find themselves in need for increased shares to finalize projects, then if under that 12 month period they reach that limit they would be forced to do a reverse split to facilitate their corporate needs.
Years ago the fear many small investors had was the idea of waking one morning to find their investment had done a reverse split of their common stock. But, in a reverse split, the value of the company and money invested doesn't change, its just the structure that changes. But, with endless increases in uninformed authorized share increases, this does effect investor value, and makes investing in such securities a very difficult and expensive prospect.
Recent examples of dramatic authorized share increases, and we're sure we are overlooking many more, are American Securities Resources (ARSC), or Relm Holdings (RELM), or Hall of Fame Beverages (HFBG) just to name a few.
These new rules would in no way resolve issues regarding corporate dilution, but at least it would give small investors in these securities a standing chance to invest in these securities without the issues of being left holding the bag in surprise dramatic shares increases. Some sort of rules regarding this wild-west shares authorized increases should be imposed.
Actually I did found it eventually, that last news release was a dissapointment, I wish they would come out and explain what happen to all those deals last summer and fall....it's probably ugly but at least we'll know...
Yep, just as I suspected a hostile rebuttle from management ...its too easy flushing you guys out....I have no other agenda than making people aware of the fact they're getting took by you two....if I looked at your history on Ihud board and seen other investments your interested in ( and pumping them) I would conclude your a run of the mill investor interested in plays, but both of you have not published anything other than trying to spin a scam for obvious reasons.."Your statements on this board could be construed as publicly slanderous to Jan & his team of companies at times."Please, ....I CHALLENGE YOU TWO, TELL US THE GRAND PLAN....let us hear it......Yep thought not.....l by the way you articulate yourselfs you obviously are people that are educated, tell us whats your agenda..... google map everyone of your assets its either a post office box, a house in the burbs.
What road map, what plan, the road map changes by the week!!!!
Please tell me, Jan has stated that he thinks his company is worth $12 per share, 12/share of what, HOTI isn't public, the IPO never went through. Why,why,why would you dilute the crap out of a stock for pennies WHEN YOUR COMPANY IS WORTH $12 a share.....Look at AEGY today, the poor SOB's that purchase that for a buck is now 50 cents....they didn't read the 8k, the company they merged with is worthless, it say's it in the 8k a public filing, now Henry's dumping shares,,,,you can't find hardly anything on the companies he's merged with unless you dig for hours, and when you do they're suspect.....you and LRC are Johnny come lately's and maybe your right you seen this and became a member of IHUB and wanted to add content to this board, you have added no due, except tell us what a great guy Henry is....., HMMMM you sure seem to me to be part of the scam......cheers
Gee, you are new to IHUB since May and have made 14 post all pumping SKTO....ya we'll listen to you....and your analogy of driving a car off the lot and losing money, you still have the car, if you purchased skto at a buck, you got nothing, except a stock thats going to do a 300 to 1 reverse split into a empty shell...that dividend is based on a IPO at $12/ share, the last IPO failed because the company didn't even have a address, it was a box office.....the stock hit .0042 today another all time low....now there is 12 new public companies he's aquiring, look for the pea under the shell news releases to confuse investors even more than they are now and dumping shares into them....this is taking stock scams to a whole new level....the man is smart I'll bet all of us thought of this one....
Well said!!!!!
At one time we where lead to believe that most of the acquired assets where going to fall under the SKTO stock symbol....with eight new compainies are the so called existing assest going to be split up und fall under these compainies, if so, what does SKTO get?
I'd hate to the poor soles who bought aegy at $1.10 right now
Here's an article explaining the VAT carousel frauds, if anyone is interested
cent trader in VAT carousel fraud retains entitlement to input tax deduction
The ECJ has held that an innocent trader does not lose his right to VAT input tax deduction merely because his input was part of a transaction chain to mask a carousel fraud committed by other parties.
Three UK companies appealed against Customs and Excise decisions rejecting their input tax deductions because they were trading in goods used by other parties as the subject of a VAT "carousel" (merry-go-round) fraud. In each case, the trader had a large net recoverable from his local purchases of computer components for export. A carousel fraud is committed by a trader who buys goods from another EU state for resale locally. His customer, the so-called "buffer" correctly accounts for the VAT on his purchases and sales. His sales are to another buffer. Ultimately, the goods are sold back to the country of origin, and end up in the hands of the original supplier. The process is then repeated. The perpetrator of the fraud does not account to the authorities for the VAT charged to the first buffer and absconds with the cash once they start looking into his activities. He then becomes known as the "missing trader".
In a carousel fraud, the missing trader is necessarily guilty, but some of the buffers and the original supplier may be innocent. Computer components and mobile phones are examples of goods particularly prone to carousel fraud - high value, low weight items frequently traded around the EU in large quantities and thus, at the wholesaler level, not susceptible to individual identification. In the cases currently at issue, the traders had played the role of final buffer in the country of the missing trader, that is they had taxable inputs - their purchases from the penultimate buffer - and tax-free outputs, their sales to the country of the original supplier. In all three cases they were innocent of wrong-doing. They did not know of the fraudulent intent and could not have known of the fraud itself, not least since the offence had not yet been committed. The UK Commissioners of Customs and Excise took the view that, innocently or not, the companies had played a part in a fraudulent chain of transactions and were not therefore engaged in economic activity. This alone was enough to deny them input tax deduction. The traders protested and ultimately the cases came before the ECJ which joined them in a single trial.
The ECJ decided in favour of the innocent traders. "Economic activity", "supply of goods" and "taxable person acting as such" are objective terms, unaffected by the purpose or results of the transactions, or by earlier or later events in the transaction chain. Provided the transactions are lawful in themselves, the right to input tax deduction cannot be denied to a trader because of a fraud by another member of the transaction chain, "of which that taxable person had no knowledge and no means of knowledge". The court was at pains to emphasise the distinction between lawful transactions misused for fraudulent purposes by another party and those unlawful in themselves (such as trafficking in drugs) which cannot be "incorporated into economic channels". It also emphasised that the correct payment of the VAT on an earlier or later sale of the same goods is irrelevant to the input VAT deduction of the given taxable person.
Traders set for Supreme Court after VAT appeal fails
Monday, June 7 06:30 pm
Sam Trendall Buzz Up! Print Story
A Court of Appeal ruling on several mobile firms VAT tussle has failed to provide Skip related content
the clarity expected, and the industrys battle with HM Revenue & Cust oms (HMRC) is set to continue through UK and European courts.
Calltel Telecom, Opto Tele links and Mobilx, now in administration, have previously battled HMRC in the High Court and a Tribunals process for more than £25m in combined VAT deductions. A fourth firm, Blue Sphere Global (BSG), was part of the same hearing, as HMRC appealed a tribunal ruling in the traders favour.
The case was the first to reach the Court of Appeal since the landmark Axel Kittel versus Belgium case in the European Court of Justice (ECJ). The Kittel case saw the ECJ rule that firms are ineligible to make tax deductions for transactions they knew or should have known were linked to fraud.
In a transcript of the appeal hearing, available from the British and Irish Legal Infor mation Institute, Lord Justice Moses stated that the earlier tribunal had applied the wrong test in seeking to ascertain whether traders should have known their trans act ions were more likely than not to be connected to fraud. However, the ruling against Mobilx was upheld.
The appeals of Calltel and Opto Telelinks were also dis missed, as was HMRCs app eal against the BSG decision.
CRN understands that Mobilx, Calltel and Opto Telelinks are to take their fight to the Supreme Court and the case could eventually end up in the ECJ. There are currently 800 similar cases awaiting tribunal or high court judgment in the UK, involving more than £2bn in VAT.
M Ali Akram, a VAT appeal specialist lawyer at Lexlaw Solicitors and Advocates, said the appeal hearing was something of a damp squib. But he added there were points of clarification traders could take away, such as the rulings assertion that the burden of proof lies squarely with HMRC.
The usual principle is he who asserts, must prove, and that has been very clearly stated by the Court of Appeal, he said.
Akram welcomed the possibility of a Supreme Court appeal, claiming UK legal tests are a higher hurdle than those applied in the Kittel case.
It is inherently unfair for HMRC to proceed against exporters and not the fraudsters directly, he said. It is imp or tant that the full weight of Supreme Court judicial attention is brought to bear on the actions of HMRC.
The appeal also directed tribunals to look beyond a firms due diligence proces ses and consider if wider business practices provide any real evidence of fraud. This was welcomed by Akram and Tony Guise, partner at VAT specialist Guise Solicitors.
A lot of things exporters do are perfectly good practices, said Guise. The judgment also clears up the burden of proof and makes it clear that the [HMRC] test is wrong.
Anthony Elliot-Square, managing director of the International Phone Traders web site, was underwhelmed by the appeal ruling.
It does not help anybody and skirts around the issues, he said.
HMRC continues to stigmatise mobile and CPU traders and cast doubt on the legitimacy of large portions of the industry, added Elliot-Square.
HMRC is using a back-door route to make people pay, he said. Basically this is legalised theft.
This could have ran easily to multi pennies before turning the printing press....
Thier diluting endless into the press release, seen it a zillion times, still I hanen't learned
Brutal dumping, don't know whether to buy more or wait
you can get reatime level two on pinksheets
Their website gone, not good
you can get level two on pinksheets
It comes down to this, did they knowingly participate in the buy/selling of mobile equipment to other traders that formed a courisal (sp?). If they did they're guilty and we get nothing if not and where honestly making transactions with other traders then the outcome will be the same as blue sphere. The good news is it looks like cases are finally being processed, i dont know when tricell case comes up....if they drop the case, well we're screwed
Traders have clearer position after Blue Sphere
Tony Guise provides a legal perspective on new cases that may involve VAT fraud
CRN, 03 Jun 2010
The Court of Appeal’s recent judgment in the joined appeals of Blue Sphere Global Limited (BSG), Mobilx Limited (Mobilx) and Call Telecom Limited and Opto Telelinks Limited (Calltel) brings a welcome restatement of the law – and helpfully sets out the correct approach to cases where traders have become unfortunately mixed up in a chain of transactions that at some point involved a fraudster.
Starting from basic principles, Lord Justice Moses (supported by Lord Justice Carnwath and Sir John Chadwick) reiterates the approach of the European Court of Justice to the issue of when HMRC may deny a taxpayer the right to deduct input tax.
"Kittel… enlarged the category of participants to those who themselves had no intention of committing fraud but who, by virtue of the fact that they knew or should have known that the transaction was connected with fraud, were to be treated as participants.
"Once such traders were treated as participants, their transactions did not meet the objective criteria determining the scope of the right to deduct."
The extent of such knowledge is therefore key, and in previous cases HMRC had sought to extend the scope of the test so that the right to deduct could be denied on the grounds that the trader “knew or should have known that it was more likely than not that transactions were connected to fraud”.
This is the wrong test
The Court of Appeal has made clear that this is the wrong test. The Court affirmed the first-instance decision in BSG that the right to deduct input tax may only be denied where the trader knows or should have known that the transaction was connected to fraud.
Traders who only might know the transaction was tainted by fraudulent evasion of VAT therefore cannot be regarded as a participant in that fraud.
So the trader’s state of mind needs to be considered carefully and the state of his or her mind is to be established, according to the Court of Appeal, by identifying that the only reasonable explanation for the transactions is the connection with fraud.
The long-running issue about who must prove the state of knowledge has also been settled. The Court made plain that if Customs wishes to allege a certain state of mind in the trader, it must prove it.
This echoes the approach of Briggs, J in the appeal in Megtian Limited (in administration), decided on 15 January 2010, where the Court indicated that it is for Customs to establish the state of mind of the taxpayer’s officers.
Of course that is after having identified him or her.
In the joined appeals, the Court of Appeal drew attention to the surrounding circumstances, which can help in establishing whether a particular officer should have known a transaction was connected with fraud.
Another relevant case
The decision of Brayfal Limited, decided by the First Tier Tribunal (Tax) on 3 March 2010, assists in this regard.
Judge Demack sat with two members. The members came to the view that Customs’ allegations about the trader’s state of knowledge were unfounded and summarised their views as follows:
• Lengthy experience of the mobile phone export business was a positive indicator for the trader
• The absence of trade references did not suggest knowledge of fraud
• Choice of insurer in any country of the trader’s choice was not suspicious
• Compliance with verbal contracts was not a suspicious way of doing business despite the lack of any written terms
• The use of FCIB as a banker was no cause for concern as at the material time no authority had taken any steps against FCIB
• Customer-driven transactions were not surprising and in fact were to be regarded as the norm
• The only equipment required for trading in mobile phones is a mobile phone and a fax machine
• The absence of credit terms is not suspicious but consistent with trade in this sector
• Low or non-existent credit ratings from credit agencies should not be taken as an indicator of suspicious activity. Any company trading mainly in cash would not expect any credit rating
• It is inappropriate to expect traders to carry out verification checks on other traders apart from those with which they deal directly
• Checking the validity of VAT numbers through Europa was perfectly acceptable
• The fact that stock was immediately available in the precise number, type and models is indicative only of typical business practice in the sector where product can be sourced at short notice.
Refreshing news for resellers
These recent decisions are refreshing for the reconnection they make with the correct law and commercial reality.
So far, the taxpayer has had a good year in the Courts, which makes prospective settlements with Customs more likely. Innocent traders will at last begin to recover most of the money they have been denied by Customs, without the cost and delay associated with litigation.
Tony N Guise is director at Guise Solicitors