LONDON, Sept 23 (Reuters) - Four British men have been sentenced to a total of 19 years in jail for their part in the theft of 7 million euros ($9 million) in EU carbon credits, which led to the temporary suspension of trade in the European market.
Ruman Patel, Hanif Patel, Ayyub Ibrahim and Mohammed Hanif Patel, arrested between June 2012 and April 2014, were part of an international syndicate that masterminded the theft of 500,000 EU Allowances from the Czech emissions registry in January 2011, Britain’s National Crime Agency said on Tuesday.
Appearing in Burnley Crown Court in Northern England on Tuesday, the four men were handed jail terms of between 32 months and seven years for encouraging or assisting in the handling of stolen goods, money laundering and fraud.
Helped by a hoax bomb threat made to the registry, the group on Jan. 18, 2011 hacked into the online account of Czech state-owned utility CEZ and stole the allowances, which at the time had a market value of 7 million euros.
The credits were then sold on to different companies including London-based SVS Securities plc, oil major Royal Dutch Shell and investment bank Credit Suisse.
A series of carbon credit thefts on the Czech registry that day led the European Commission to temporarily suspend allowance transfers at all EU nation registries, effectively bringing a large portion of the bloc’s carbon market to a halt.
The National Crime Agency said neither the credits nor the proceeds from the sales had been recovered.
A source involved in the trial, who asked not to be named because he was not authorised to speak to the press about the case, said the money was channelled to bank accounts in Dubai, India, China and Hong Kong before investigators lost the trail.
The four men set up two companies - Segel SP ZOO and Huntingdon SP ZOO - and opened trading accounts for them on Poland’s and Liechtenstein’s emissions registries.
“Intelligence shared by officers from the National Crime Agency and the Czech Police showed the companies were set up for the sole purpose of transferring the stolen credits,” the National Crime Agency said in an emailed statement.
According to EU records, the two firms briefly handled the 500,000 units CEZ reported as stolen from its registry account.
The Czech government in March 2011 replaced the 1.175 million credits stolen from three accounts on the registry with allowances from a government reserve.
Some 200,000 units also were stolen from a separate CEZ account and a further 475,000 allowances from Czech trading firm Blackstone Global Ventures.
The source said prosecutors had not linked the four men to the other thefts and saw them as “foot soldiers” in a larger international organised crime operation.
“They may not have known exactly how their companies would be used or have an inkling of how much money was involved, but they would have known that the companies would be used by a sophisticated, international criminal group,” said Russell Tyner, a lawyer with the organised crime division of Britain’s Crown Prosecution Service.
$1 = 0.7785 Euros editing by Jane Baird