A 15-STRONG GANG has been found guilty of an attempted £176m VAT fraud by engaging in complex mobile trading scams.
Ring leader Dilawar Ravjani received a 17-year stretch in prison for his part in the scheme, the longest sentence handed down in the UK for this type of fraud.
The gang claimed it sold four million mobile phones worth £1.7bn, despite failing to prove the existence of many of these, while about 250,000 were not yet launched in the UK.
In order to give the operation a veneer of legitimacy, more than 5,700 false business transactions were created in order to claim large amounts of VAT.
Future Communications – an enterprise set up by Ravjani – was part of a series of fake companies which claimed to export phones. At the same time, it also imported goods that allowed other traders, including sister company Unique Distribution, to seek substantial VAT reclaims.
Another of Ravjani’s companies, Property and Management Services Ltd – run by his sister, Roshan Hussain – employed offshore banks, car sales businesses, a property investment company and a loans company in order to launder the proceeds.
The Revenue began investigating the operation in 2006, with the first arrests made within three weeks of the probe, scuppering the £176m fraud and preventing a further £109m of fabricated VAT payments.
During the arrests, officers seized about £170,000 in cash, including £47,000 which was found in carrier bags in the boot of a car owned by John McFarnon, a director of Unique Distribution.
Chris Martin, HMRC assistant director of criminal investigation, said: “Fraud on this scale causes immense damage to the tax revenues of the UK and the European Union.
“This was a complex and well-organised fraud which made a huge profit for the gang at the expense of UK taxpayers, but the dedication and techniques used by HMRC officers in this investigation resulted in the successful prosecution and convictions of these criminals. We will now seek to recover the proceeds of this crime.”
Confiscation proceedings are now underway to recover any assets the gang members received as a result of this crime. The actual tax loss totalled £107m.
At HMRC, Dmitri Surendran was responsible for leading the London team of the offshore, corporate and wealthy unit of the fraud investigation service
Research also finds that 84% of businesses believe that the government has not provided enough information about digital tax plans
A total of £16bn was lost through tax fraud last year, according to estimates released by Pinsent Masons
Additional tax a result of compliance investigations by HMRC, but overall revenue falls