VAT fraudster ordered to repay £2.2m

A convicted fraudster from Lancashire, who was part of a VAT repayment fraud involving fake construction companies, must repay more than £2.2 million.

Salim Sakaria, 46, of Preston, was one of the key players in an 11-strong crime gang that attempted to steal £4.2 million between 2009 and 2011. But the fraud unravelled after a long and complex criminal investigation by HM Revenue and Customs (HMRC).

The gang, led by Sakaria, set up 19 fake construction companies, used ‘puppet’ directors, fake invoices and bogus building contracts for housing developments as a smokescreen to hide their criminal activity.

People were paid up to £35,000 to act as directors and allow the gang to use their names and addresses for the bogus companies to claim illegal VAT refunds. Twenty companies were repaid £2,932,084 for fake VAT claims before HMRC froze repayments.

Voice recognition technology showed Sakaria contacted HMRC by phone about the fraudulent VAT repayments.

On 11 April 2017, Salim Sakaria was ordered to repay £2,276,149 within three months or serve a further compulsory seven and a half years in jail as a default sentence.

Sakaria, who worked at Forte Accountants in Preston, lied about being an accountant. HMRC investigators found that as well as owning six properties in the Preston area valued at £408,464, a designer watch and a Mercedes Benz car, he had almost £2 million in cash generated by the fraud some of which had been transferred to Dubai.

HMRC investigators arranged a restraint of Sakaria’s assets while the confiscation proceedings progressed through the courts. Any sale of the restrained assets will now be used to fund the confiscation payment.

Notes to Editors

1.Salim Sakaria, DOB 28/09/70, of Great Avenham Street, Preston, pleaded guilty to the VAT fraud on 2 May 2014 and was sentenced to five years jail on 9 October 2014. He was sentenced for an assault charge the same day and a further three years were added to his jail term (to run consecutively).

2.Six Preston properties in Bank Parade, Great Avenham Street, Selbourne Street, Acregate Lane, Roman Road and Rutland Street were restrained pending the outcome of this confiscation.

3.This case was held at Manchester Crown Court over several years, concluding in 2014. Jail sentences totalling 17 and a half years resulted for 11 people. Twenty companies were used by the fraudsters, one genuine building company and 19 fake business entities in an attempt to disguise the fraud.

4.There is no appeal against default jail sentences issued in confiscation orders and the order for repayment remains in place after the default sentence is served by the fraudster. If the assets held by the convicted criminal at the time of the order are less than the benefit derived from the fraud, then any future assets can be confiscated up to the value of the benefit of the fraud.

5.Anyone with information regarding fraud is encouraged to contact the new HMRC Fraud hotline on 0800 788 887 or report it online via: http://www.hmrc.gov.uk/reportingfraud/online.htm

6.Follow HMRC’s Press Office on Twitter @hmrcpressoffice

7.HMRC’s Flickr channel www.flickr.com/hmrcgovuk