UK Court Kills £1bn Office-Box Tax Dodge as US Targets $26bn Tariff Loophole and Medicaid Family Fraud

The UK's £1bn office-box scam just lost in court

At 2 America Square, a seven-storey office block half a mile from Tower Bridge in London, most of the building isn't full of workers. It's full of black boxes, stacked in neat rows, according to The Guardian.

The building is leased by 48th Street Holdings Ltd, a Virgin Islands-registered company that paid £27.6 million for the lease in 2019. It then hired Principled Offsite Logistics Ltd (POLL) to run a scheme known as "box shifting," which The Guardian and britbrief.co.uk both report saved the company £111,475.30 in business rates across several three-month periods in 2022 and 2023.

Here's how it worked. Since 2008, when the last Labour government scrapped a 50% discount on rates for empty commercial buildings, owners have been entitled to a three-month rate holiday whenever a tenancy ends. Companies figured out they could move boxes into a vacant building, leave them there for six weeks, move them out, and let the building sit empty again, resetting the clock for another rate-free window. Repeated indefinitely, it cut what owners owed by up to 67%, according to The Guardian.

One London council estimated the scheme was costing it £35 million a year since claims for empty property relief doubled during the pandemic. Nationally, the practice is believed to have cost local authorities more than £1 billion.

That run appears to be over. Three Court of Appeal judges ruled last month, in a case brought by the City of London Corporation against 48th Street and POLL, that occupying a building purely to trigger a rates holiday "cannot amount to beneficial occupation." Lady Justice Falk wrote that occupation "for, in effect, the sake of it, and which has no use, value or benefit other than rate saving, does not amount to occupation for the purpose of the statutory scheme," according to britbrief.co.uk. The ruling overturned an earlier High Court decision.

POLL, jointly owned by a Labour councillor from North Hertfordshire, had claimed by 2021 to have already saved clients £500 million in rates and boasted that "every council in the UK now totally recognises Principled as being robust in every way." That confidence followed a 2018 High Court win against a challenge from Trafford council. A City of London Corporation spokesperson called the new ruling "a significant victory for local authorities across England" that "closes one of the most widely used tax avoidance schemes in the country." A government spokesperson acknowledged "concerns about the misuse of Empty Property Relief," while noting the relief exists to support legitimate property owners between tenants, a fair point given the discount wasn't designed to be abused but does serve a real purpose for owners genuinely between occupants.

Washington says China and 40+ countries are dodging tariffs the same way

Across the Atlantic, the White House Office of Trade and Manufacturing Policy, led by trade adviser Peter Navarro, released a 25-page report Thursday titled "The Great Transshipment Scam," according to Fox News. It estimates tariff-dodging transshipment costs the U.S. Treasury between $19 billion and $26 billion a year in lost revenue.

The mechanism: goods get routed through an intermediary country, sometimes with minor repackaging or relabeling, so they enter the U.S. under a different country of origin and qualify for lower tariffs. The report names China as the clearest example, saying that after Section 301 tariffs hit Chinese goods in 2018, the direct U.S.-China trade deficit fell, but exporters "increasingly routed goods through third countries." More than 40 countries are flagged as high transshipment risk, including Panama, Mexico, Colombia, Brazil, Argentina, Chile, Peru, Costa Rica and the Dominican Republic.

"For years, the great transshipment scam has let communist China launder its exports," Navarro said, according to Fox News.

Transshipment enforcement is genuinely hard to police. Legitimate global supply chains also route components through multiple countries for real manufacturing reasons, and the report doesn't specify how it separates fraudulent relabeling from ordinary cross-border assembly. Fox News's report doesn't include pushback from any of the 40-plus named countries or from economists who might dispute the administration's dollar estimate.

Medicaid fraud and the "family loophole"

Sen. Joni Ernst (R-IA), chair of the Senate DOGE Caucus, introduced a bill she's calling the "No Cash for Cohabitating Kins of Crooks Act," according to the Daily Wire. It targets a pattern where a person caught defrauding a government program simply reopens the business under a spouse's or child's name, sometimes at the same address, and keeps collecting payments.

The bill follows the Daily Wire's Medicaid Millions series by reporter Luke Rosiak, who documented cases including Robert Acheampong, a Ghanaian man in Columbus, Ohio, who pleaded guilty to Medicaid fraud for billing nonexistent elder care. His wife, Esther Acheampong, then started Omega Healthcare Services, which was paid $5.7 million by Medicaid, operating out of the same office suite. Robert never paid his restitution and the government placed a lien on him while continuing to pay his wife. A separate case, True Home Healthcare LLC, is listed as owned by Mamusu Kanu but is co-owned in practice by her husband Alieu Conteh, who has multiple convictions for giving false names and had his nursing license suspended, according to the Daily Wire. That company bills Medicaid up to $100,000 a month.

Ernst said the bill "will close the fraudsters' family businesses by prohibiting hooligans living in the same house from getting their hands on taxpayer money." Shared addresses or family ownership alone don't prove fraud. Plenty of legitimate small businesses are family-run, and Ernst's bill will need to define the line clearly enough to avoid punishing innocent relatives who had nothing to do with the original scheme.

Ernst is retiring from the Senate in January. Whether her bill gets a vote before then, and whether the Trump administration's transshipment findings translate into new tariff enforcement actions against the 40-plus flagged countries, remain open questions.