More than £500,000 has been confiscated from an island businessman suspected of money laundering and a £21m VAT fraud in the UK.

The cash was seized during raids at the Onchan home of Paul Anthony Bell and at his business premises in Hill Street, Douglas.

Police and customs officers executed search warrants at the two addresses in March 2015 as part of an inquiry codenamed Operation Braid being carried out jointly in the island, the UK and Guernsey.

It is alleged that Mr Bell presided over a complex organised crime group suspected of being involved in an attack on the UK tax system. Her Majesty’s Revenue and Customs believe the group evaded some £21m in VAT.

Mr Bell, however, has not been charged with any offence. But details of allegations concerning him have now been made public in a court judgment.

He was arrested at Heathrow airport on March 18 2015 while returning from a trip abroad. He had £5,000 in cash on him at the time.

A total of £484,951 was seized from his home in Onchan and £16,000 from the Douglas business address. Searches conducted at addresses in the UK recovered some £347,000 in cash.

Some of the cash found in the safe and garage at the Onchan address was in various foreign currencies.

In court he was described as the ‘controlling mind’ behind island-based Regency Travel, which is being wound down and is to close later this year.

An application for the forfeiture of the cash was made by UK barrister Timothy Sinclair Green on behalf of the Attorney General.

During a previous appearance before the Deputy High Bailiff, Mr Bell stated that the cash was his but declined to say where it came from, arguing this could prejudice any criminal trial.

The forfeiture application heard that Mr Bell is suspected in the UK of conspiracy to cheat the public revenue, conspiracy to evade VAT and conspiracy to launder the proceeds of crime. He is also suspected in the Isle of Man of money laundering, conspiracy to do an act against public justice and conspiracy to money launder. In Guernsey he is suspected of money laundering.

The court heard that the alleged VAT fraud involved a payroll supplier receiving payments for workers’ wages from legitimate employers, which was then invoiced by one of Mr Bell’s companies for payroll services.

Invoices included charges for the wages, the fee and VAT. Payments were transferred to another Bell company which then paid the workers’ wages and retained the fee and the VAT.

It is alleged that the fee and the VAT were then mixed with other funds in the final Bell company bank account and the funds were then transferred to Mr Bell directly, or to other companies under his control.

Several genuine payroll companies were acquired, their staff, the court heard, being used as ‘the commodity for a missing trader style VAT fraud’.

No crime has been alleged regarding Regency Travel cash.

Ruling the cash be confiscated, acting Deputy High Bailiff Alan Gough said: ‘I accept that no criminal charges have been brought against Mr Bell in relation to the alleged VAT offences but there is sufficient evidence of such offences having been committed.

‘He has benefitted directly from the alleged fraud and has derived the cash from activities related to the fraud. Mr Bell has provided no explanation of the alleged VAT fraud or why he has accumulated from several sources such large amounts of cash at the two premises.’