Shelton Irikefee Omene used his position at a tax office to pass details about customers' accounts to fraudsters running a "sophisticated" money laundering operation.

Newcastle Crown Court heard that the 32-year-old, of Burns Close, South Shields, was employed by Her Majesty's Revenue and Customs (HMRC) at Cheviot House, Washington.

Allison Summers, prosecuting, said: "He used his employment with HMRC to access confidential information related to taxpayers and then fed that to others for the purpose of facilitating fraudulent tax claims."

Miss Summers said taxpayers' names, addresses, National Insurance numbers and unique HMRC reference numbers were passed on.

She said the data was used to rake in £3,000 in false tax credit claims, plus "just over £30,000" by using HMRC systems to launder money from stolen debit cards.

The court heard the fraudsters used the information to contact HMRC, pretending to be the account holder, and request a change of address.

The scammers then set up a self-assessment account online via the HMRC website, and a unique PIN was sent out by post.

Miss Summers said: "So you can see why it is important that the fraudsters change the address to somewhere they have control over."

Miss Summers said an audit trail of use of the HMRC Taxpayers Business Service programme showed accounts in question had been accessed by Omene.

She said a text message sent to Omene's mobile phone – "I need your ac for next week" – linked him to the fraudsters.

"Few people take risks without payment or reward," she added.

"The inference is Mr Omene was being paid for the information he was providing."

Omene denied conspiracy to defraud, between December 2006 and January last year, and a jury was sworn in at a trial expected to last two weeks.

But yesterday, on the second day of the proceedings, Omene changed his plea to guilty.

The case was adjourned until the week of January 5, when he will be sentenced.