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An arrest has been made as part of an HMRC criminal investigation into a company awarded a £25 million Covid PPE contract during the pandemic, after being referred by a senior Conservative Government minister.
It comes five years after Byline Times revealed how the company, Luxe Lifestyle Ltd was awarded the contract despite Companies House records at the time suggesting it had no employees, no assets, no turnover and was £9,000 in debt.
The firm was awarded the bumper PPE deal via the government’s unlawful VIP Lane, which helped secure contracts for politically connected individuals and companies.
An investigation by Good Law Project discovered that the firm’s offer to supply PPE was referred to civil servants by former Conservative Party Chairman and Minister Greg Hands.
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News of the arrest was revealed by Good Law Project. According to their report “The firm’s director, Karen Brost, was arrested on suspicion of fraud by failing to disclose information, conspiracy to cheat the public revenue and fraudulent evasion of income tax. Her husband, Tim Whyte, is suspected of acting as a shadow director and is also being investigated in connection with the same offences”.
Former Minister Greg Hands forwarded on the Luxe Lifestyles PPE offer to officials, after being approached through his personal email account, by Conservative Party activist Mark Higton – the then chairman of the Hammersmith Conservatives. The same month Luxe Lifestyle were subsequently awarded a £25m contract by the Department of Health and Social Care to supply gowns and masks.
Furthermore leaked documents, obtained by the Good Law Project, later listed a PPE contract as “Minister Hands/Luxe Lifestyle” and the point of contact as “Mark Higton”.
A subsequent freedom of information request revealed that nine million items worth £20m, provided by Luxe Lifestyle, had been labelled “do not supply” by officials, meaning they were not used and have subsequently been destroyed.
Civil Servants Felt Pressured Into Giving ‘Special Treatment’ to Conservative-Connected COVID PPE Suppliers
Private correspondence reveals officials felt threatened by firms benefiting from “back-scratching” by Conservative ministers
Byline Times previously reported on the firm’s failure to publish any company accounts covering the period from December 2019 onwards – four months prior to the first national lockdown.
However, reports suggest Luxe Lifestyle ‘made a profit in excess of £5m’ from the VIP lane PPE deal, despite supplying millions of items deemed unsuitable for use.
Despite the controversy surrounding the previous government’s unlawful VIP Lane, the number of arrests are low – with only one other known arrest made public – In June 2024, A 46 year old man was arrested in connection to the NCA’s ongoing criminal investigation into PPE Medpro.
PPE Medpro secured PPE contracts from the DHSC valued at £203 million after being referred onto the VIP lane by Conservative Party Peer Baroness Mone.
Are More Arrests on the Horizon?
Back in January, following a Parliamentary Question from Phil Brickell, Labour MP for Bolton West, it was revealed that a number of investigations were being conducted by HMRC in relation to the fulfilment of “government contracts relating to the procurement and onward supply of Personal Protective Equipment (PPE) and similar products during the COVID-19 pandemic”.
However, James Murray, The Exchequer Secretary did not put a figure on the number of companies under the HMRC spotlight.
This paper can now reveal that potentially up to four companies may also be under “criminal” investigation by the HMRC, but the authorities are refusing to provide the exact number of the names of the firms under scrutiny.
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In a Freedom of Information response officials confirmed that: “There are currently fewer than five companies subject to criminal investigations for tax offences suspected of having been committed by those seeking and fulfilling government contracts relating to the procurement and onward supply of Personal Protective Equipment (PPE) and similar products during the COVID-19 pandemic.
“We have withheld exact figures where totals are fewer than five as releasing those numbers could risk identifying the individuals concerned”.
Good Law Project’s executive director, Jo Maugham, said: “There are many questions still to be answered about how former Tory minister Greg Hands came to be recorded by Matt Hancock’s Department of Health and Social Care as a winner of the Luxe Lifestyle PPE contract and the nature and extent of his involvement,”
Lawyers for Karen Brost, Luxe Lifestyle Director told Good Law Project: “that she denied the offences in interview, was released without charge and is not subject to bail. Brost’s position is that she is innocent of the offences under investigation”. Tim Whyte said he was unable to offer any comment until the HMRC investigation had been concluded.