A CROOKED Somerset stamp dealer convicted of using the identities of dead babies to create illegal passports has been jailed for VAT fraud.

Philip Ryle, 58, of Dovetail Drive, Weston-super-Mare, stole more than £300,000 through an intricate web of cash transfers and VAT claims through a string of companies.

He had set up the firms to create a series of fake trades in rare stamps, an investigation by HM Revenue and Customs revealed.

Ryle sold the stamps from one of his companies to another for up to 800 pe cent of their true value.

The second company would reclaim the VAT while the first company would not pay the VAT owed on the sale, leading to Ryle fraudulently claiming more than £300,000.

Ryle was jailed for five years in 2002 for his part in a passport scam which used the identities of 37 dead British babies to obtain false passports.

The passports were were then sold to criminals and illegal immigrants, copying a plotline from Frederick Forsyth’s 1971 novel The Day of the Jackal.

Richard Wilkinson, assistant director of HMRC's Fraud Investigation Service, said: “Ryle is a hardened fraudster who has no problem with lying, cheating and manipulating others to make money.

"He thought his stamp dealing scam was clever enough to slip through the net, but our investigators ensured that justice was delivered.

“HMRC will pursue tax fraudsters relentlessly to stop them stealing funding from the public services we all rely on."

Anyone with information about tax fraud can report it to HMRC online or call the hotline on 0800-788887.

Ryle, who was previously convicted under the name Philip Ryall, was the director of five companies, three of which were were struck off owing more than £695,000 in unpaid VAT.

He used one of these – Rare Stamps Associates Ltd – to buy hundreds of stamps from outside of the EU, and sell them at vastly increased prices to another of his companies, UK Philatelics Ltd.

He then sold the stamps for their genuine market value to overseas buyers mainly in the US.

Ryle did not pay the VAT due on for the sales made by Rare Stamps Associates, but still claimed more than £300,000 in VAT repayments for UK Philatelics and attempted to claim another £90,000, which was refused by HMRC.

Rare Stamps Associates Ltd was wound up by Ryle in August 2014 but he set up a third company - P.E. Philatelic Exports Cyprus Limited - to carry on the fraud.

He was jailed for three years and eight months at Bristol Crown Court on Friday (September 28) having admitted cheating the public revenue at the same court on September 18.

HMRC has begun confiscation proceedings to recover Ryle’s ill-gotten gains.