A Berkshire-based gang that stole £34 million in VAT and laundered £87 million after selling illicit alcohol have been jailed for more than 46 years.
Nine fraudsters, headed up by Jayesh Shah, Riaz Khan, Fiaz Raja and Muhammad Rasool, orchestrated a missing trader (MTIC) VAT fraud. Gang members then laundered the stolen tax and the proceeds from selling illicit alcohol.
The group created a complex chain of paperwork detailing fictitious transactions, which were used as a cover for the illicit sale of smuggled alcohol.
Evidence showed £87m was laundered through more than 50 bank accounts in Britain, Cyprus, Hong Kong, Dubai and other foreign countries.
A HM Revenue and Customs (HMRC) investigation found the gang operated from an office in Eton High Street, and then moved to Windsor during the two-year fraud.
Officers caught the fraudsters red-handed when they installed covert cameras in one of the offices being used by the gang. Footage was shown in court of Khan, Rasool and Raja giving comprehensive instructions to other members of how to carry out the fraud.
Now, the gang of nine have been sentenced to more than 46 years in prison.
Richard Mayer, Assistant Director, Fraud Investigation Service, HMRC, said:
“This was a well-planned money laundering operation and tax fraud that stole millions of pounds of UK taxpayer money which should have been used to fund vital public services in the UK.
“The sums stolen by this organised crime group could have paid the equivalent of 1,400 salaries of newly-qualified teachers – enough to fully staff around 93 schools.
“Money laundering supports organised crime and is harmful to businesses, the public and society as a whole. Tackling this crime is a priority for HMRC and we will not hesitate to investigate those suspected of being involved.
“The honest majority of business owners pay what they owe and claim back the VAT they are entitled to claim. Concerted HMRC compliance activity has seen UK VAT losses from Missing Trader Intra-Community (MTIC) fraud decrease from three to four billion pounds in 2006 to around £250m a year today.
“If you know of anyone committing any type of tax fraud, you can report them to HMRC online or call our Fraud Hotline on 0800 788 887.”
Nasra Butt of the Crown Prosecution Service said: “Each of the convicted defendants played their part in a sophisticated operation designed to defraud HMRC. Between January 2013 and January 2015, they generated a loss of £34.2 million to HMRC and I am pleased that we have brought this organised crime operation to justice.
“Despite the evidence against them, some of the defendants refused to admit their part in this operation, but we were able to prove otherwise. They will now spend more than 46 years in prison.”
Six men were jailed earlier this year after a three month trial. Of the remaining three, one pleaded guilty in May and two were convicted after a second trial, which ended after eight weeks on 26 July 2019.
Shah, 52, of Wembley, Khan, 49, of Windsor, plus Raja, 51, and Rasool, 38, both of Slough, headed the gang who laundered the proceeds of illicit alcohol importations using companies under their control. The fraud was carried out over two years between January 2013 and 2015.
The sophisticated scheme would begin with a company purportedly supplying goods to another, and charging VAT on them. But instead of the supplying company handing over the VAT to HMRC, the fraudsters would pocket the money and the business would later disappear – becoming a “missing trader”.
The same consignment of goods would then be sold on through one or more so-called “buffer companies” before reaching a cash and carry at the end of the chain.
Each company in the chain would submit a VAT return showing that little or no tax was due to HMRC.
The investigation team dismantled the complex operation after executing more than 20 warrants in January 2015 across London, Berkshire, Surrey, East Sussex and Buckinghamshire, seizing computers, £370,000 cash and business records.
Confiscation proceedings against the group are now underway.
Sentencing comes just days after HMRC announced a record £7.8m fine for a Money Service Bureau in London for breaching anti-money laundering regulations. Fraud investigation Service director Simon York also delivered a keynote speech on Monday at the Cambridge Symposium on Economic Crime on how international collaboration can tackle the most hardened tax criminals in the world.