Carousel VAT fraud gang told to repay £35m

Four men have been ordered to repay £35m or face more time in prison after being jailed for a total of 50 years for their part in an attempted £176m VAT fraud.

They were part of a gang which claimed to have sold more than 4m mobile phones but were caught after an investigation by HMRC revealed many of the phones were fictitious. Investigators reviewed VAT repayment claims submitted by companies linked to the conspiracy and stopped £67m being paid to them.

Dilawar Ravjani, from Middlesex, was jailed for 17 years for his part in a leading a 15-strong criminal gang. The gang also included Tamraz Riaz, from Wakefield, who was sentenced to 13 years; Rajesh Gathani, from Middlesex, who was sentenced to eight years; and Zafar Chishti, from Watford, who was sentenced to 11 years. Chishti fled prior to his trial and is still on the run.

The gang claimed to have sold mobile phones worth around £1.7bn, but in many cases the phones did not exist – including 250,000 handsets which had not even been launched in the UK. They also faked 5,700 business documents in an attempt to make their trade seem legitimate.

The fraud involved the VAT-free import and export of mobile phones from EU countries. The phones were supposedly sold on through a chain of companies in the UK with VAT added. Invoices were issued to facilitate the fraud and reclaim the VAT. They would then claim that the phones had been exported back to EU countries. 

A corrupt freight forwarding company also provided false paperwork for the alleged transportation of the phones and then claimed an additional VAT repayment.

Robert Alder, assistant Director, criminal Investigation, HMRC, said: ‘This major investigation uncovered the severe abuse of our tax system by a ruthless criminal gang who made a huge profit from the fraud. They have already lost their freedom and now their illegal wealth will be taken away as well. These confiscation orders will rid these criminals of all their illicit gains so they can be reclaimed for public finances.’

Eleven other gang members were sentenced to a total of 21 years and confiscation proceedings are now underway to reclaim their criminal profits.


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