Press release -
HM Revenue & Customs (London): £37m tax crime gang jailed
The final defendant of a 21 strong crime gang has been sentenced today for his part in a £37.5 million tax fraud. In total they were jailed for a total of 74 years.
The sentencing ended one of the most complex investigations undertaken by HM Revenue & Customs (HMRC) and came at the end of seven trials and retrials.
Investigations began in April 2002 into the ‘missing trader’ fraud, involving the dishonest manipulation of the VAT system through the import and export of computer processing units (CPUs). The gang used highly complex chains of VAT registered companies both here and abroad. One of the ‘missing traders’ used was Shivani (Limited) - an anagram of ‘I Vanish’.
Criminal investigators from HMRC exposed the fraud which has resulted in seven interlinked trials and retrials, codenamed Operation Devout. Reporting restrictions have now been lifted following the conclusion today of the seventh and final trial.
Adrian Farley, Assistant Director of Criminal Investigation for HMRC, said:
“This was not some kind of victimless crime, but organised fraud on a massive scale by criminals masquerading as legitimate businesses all bent on making fast and easy profits at the expense of the British taxpayer. Multiple businesses and bank accounts were deliberately set up to carry out the fraud and hide the proceeds of these crimes. However, each defendant knew the purpose of the payments they received were for money laundering and not legitimate trade.”
The conspiracy involved the import of CPUs mainly from Ireland, VAT free. The goods would then be sold more cheaply, but with VAT added, through a chain of companies each involved in the plot and sham invoices would be issued. Once the goods had been sold on a number of times they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods.
The gang would divide the dishonest profits of the fraud and launder them through various bank accounts both in the UK and abroad. The account holders would then withdraw the bulk of the cash and were paid a commission for their dishonest service. Some of the money is believed to have been invested in a third a tonne of gold bullion, substantial property in Dubai and a luxury flat near Harrods.
Twelve bank accounts were set up under the names of Woodland Supplies, Acorn Trading, Aurum Wholesale, Modular Design, Probus Computing, Aslan Creations, Rapid Distribution, GK Telecommunications PLC, GK Telecom (UK) Limited, Gardham Limited, Glaston Limited and NCT Training Limited. A second line money laundering account was also set up in the name of Betta Solutions Limited.
Confiscation proceedings to reclaim the proceeds of the crime are now being pursued.
Notes for editors
1. Strict reporting restrictions have been in place throughout all seven trials. These were removed today 25 May 2010, with the sentencing of the final defendant Harbans Singh Kohli to two years and six months in prison. See Devout 1 Trial two.
2. Photographs of the majority of defendants are available and diagrams charting their role in the fraud.
3. To view the documents associated with this release, please use the link below:
http://nds.coi.gov.uk/Content/Detail.aspx?ReleaseID=413506&NewsAreaID=2&ClientID=257
4. Complete court details are attached. Details of defendants and sentencing include:
Operation Devout 1 – Five trials including two re-trials
This operation involved three linked trials and saw 14 men convicted, and sentenced to a total of 26.5 years for their part in a plot to steal £12.5 million, in just 15 days, through the sophisticated ‘missing trader’ VAT fraud.
Devout 1 – Trial one.
Details of defendants and sentencing at Northampton Crown Court on 14 August 2006 (Farrell) and the remaining defendants on 30 March 2007.
Farrell, Sheasby, Jeyakumar, Ahmed and Ahmad were proceeded against by Information and Summons for Conspiracy to Cheat the Public Revenue under of the Criminal Law Act 1977. Chahal was proceeded against by Information and Summons for Converting or Transferring the Proceeds of Criminal Conduct under the Criminal Justice Act 1988.
- Stephen Farrell (DOB 07.05.59) 1,The Tryst, Birmingham Road, Lickey End, Bromsgrove, Worcestershire, was sentenced to four years in prison. He was disqualified from being a company director for 12 years.
Farrell was involved in G W 224 Limited, of Birmingham. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Mark Frederick Sheasby (DOB 16.10.61) 3 Fox Lane, Alrewas, Burton-on-Trent, Staffordshire, was sentenced to five years in prison. He was disqualified from being a company director for 12 years. The Court of Appeal later reduced his sentence to 3.5 years.
Sheasby was also involved in G W 224 Limited. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Somasuntharam Jeyakumar (DOB 26.11.61) 36 Hawthorne Drive, Harrow, Middlesex was sentenced to 3.5 years in prison. He was disqualified from being a company director for eight years.
Jeyakumar was involved in MST Associates (UK) Limited, A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Syed Mubarak Ahmed (DOB 25.09.72) 56 Beaulieu Close, Datchet, Slough, Berkshire, was sentenced to seven years in prison. He was disqualified from being a company director for 12 years.
Syed Mubarak Ahmed, one of the main players, was involved in MST Associates (UK) Limited of Uxbridge. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
· Shakeel Ahmad (DOB 07.01.72) 10 Astons Northwood, Middlesex, was sentenced to seven years in prison. He was disqualified from being a company director for 12 years. Ahmad, one of the main players, was also involved in MST Associates (UK) Limited. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Jaswender Singh Chahal (DOB 30.01.59) of 15 Hudson Road, Handsworth Wood, Birmingham, was sentenced to 18 months in prison for laundering £461,000.
Chahal ran two companies – Acorn Trading and Woodland Supplies.
Devout 1 – Trial two. Details of defendant Harbans Singh Kohli sentenced at Birmingham Crown Court today 25 May 2010 and those sentenced at Northampton Crown Court on 11 November 2007. All defendants were proceeded against by Information and Summons for Converting or Transferring the Proceeds of Criminal Conduct under section the Criminal Justice Act 1988.
- Harbans Singh Kohli (DOB 13.03.63) of 11A The Ridings, Ealing, London, was sentenced to two years and six months today, 25 May 2010, following two re-trials, for laundering just over £1 million in associated ‘missing trader’ fraud. He was disqualified from being a company director for 10 years. He was originally sentenced in 2007 but released by the Court of Appeal.
Kohli headed up a company called GK Telecommunications PLC.
- Martin Watmough (DOB 29.01.53) of 156 Arrowsmith Road, Chigwell, Essex, was sentenced to 9 months for laundering £105,000. He was disqualified from being a company director for five years
Watmough headed up a company called Gardham Limited.
- Leslie Pummell (DOB 06.06.56) of 1 Four Milk Close, Hainault, Ilford, Essex, was sentenced to 9 months for laundering £106,000. He was disqualified from being a company director for five years
Pummell headed up a company called Glaston Limited.
· Sukhdave Singh More (DOB 14.04.65) of 37 Walsingham Street, Walsall, was sentenced to 9 months for laundering £165,000. He was disqualified from being a company director for five years
More headed up a company called Rapid Distribution Limited.
Devout 1 – Trial three. Details of defendants and sentencing at Northampton Crown Court on 28 May 2008. All defendants were proceeded against by Information and Summons with Converting or Transferring the Proceeds of Criminal Conduct under the Criminal Justice Act 1988.
- Stuart Emilios Angelides (DOB 07.09.65) of 82 Lady Byron Lane, Knowle, Solihull, was sentenced to 18 months (suspended for 18 months) for laundering £150,000.
Angelides is said by the Crown to be an organiser rather than a front-line launderer.
- Peter Newey (DOB 03.08.69) of 179 Exhall Close, Redditch. Was sentenced to nine months (suspended for 18 months) for laundering £53,000.
Newey headed up a company called Betta Solutions Ltd along with Angelides and Kamal.
- Christopher Traverse (DOB 19.01.42 of 166 Streetsbrook Road, Shirley, Solihull, was sentenced to two years - 18 months for laundering £132,957 and a further six months to run consecutively for absconding.
Traverse absconded and was convicted and sentenced in his absence. A European arrest warrant was issued and Traverse was detained on 30 March 2010 by French police authorities and extradited back to the UK on 13 April 2010 and sentenced on 14 April 2010.
Traverse headed up a company called NCT Training Ltd.
- Tariq Kamal (DOB 20.12.65) of 59 Stuarts Road, Stechford, Birmingham, was sentenced to 12 months (suspended for 18 months) for laundering £53,000.
Kamal headed up a company called Betta Solutions Ltd along with Newey.
Operation Devout 2
This operation saw a further seven men convicted, and sentenced to a total of 37.5 years, for their part in a plot to steal £25 million, in just 25 days, in a similar ‘missing trader’ VAT fraud. Company director disqualifications total 65.5 years.
Devout 2. Details of defendants and sentencing at Northampton Crown Court on 28 January 2008. All defendants were proceeded against by Information and Summons with Conspiracy to Cheat the Public Revenue under the Criminal Law Act 1977.
- Pravin Jogia (DOB 25.06.47) of 4 Oak Tree Close, Bentley Heath, Solihull, West Midlands, was sentenced to 3.5 years in prison.
Jogia was a director of Aurum Jewellery (Wholesale) Limited and Aurum Jewellery 2000 Limited. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Peter John Pomfrett (DOB 29.07.53), one of the main players, of 1 Woolston Manor Cottage, Abridge Road, Chigwell, Essex, was sentenced to ten years in prison. The Court of Appeal later reduced his sentence to eight years. He was disqualified from being a company director for 14 years.
Pomfrett was a director of Globalactive Tecnologies Ltd and acted as a ‘broker’ (or shipper) – who sends the goods back to another EU member State and reclaims the VAT charged, exporting at a zero VAT rate.
- Jonah Adali-Mortty (DOB 21.01.51) of Flat D 87 Rotherfield Street, Canonbury, London, was sentenced to six years in prison. He was disqualified from being a company director for 10 years.
Adali-Mortty was a director of Lightcare Ltd. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Babak Cherazi (DOB 13.09.72) of 27 Park Road, St John’s Wood, London, was sentenced to four years in prison. He was disqualified from being a company director for 8 years.
Cherazi was a director of Beronvine Ltd. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Khaled Hamidi (DOB 13.01.76) of 75 Kingsley Way, Hampstead, London, was sentenced to four years in prison. He was disqualified from being a company director for 8 years.
Hamidi was a director of Beronvine Ltd. A VAT registered business used by the ‘missing trader’ to distance themselves from the shipper (or exporter) and reclaim the VAT charged by the ‘missing trader’.
- Mustapha Mehmet (DOB 14.01.56) of 129 Woodland Way, Winchmore Hill, London, was sentenced to four years in prison. He was disqualified from being a company director for 10 years.
M Mehmet was a director of Globalactive Technologies Ltd. and acted as a ‘broker’ (or shipper) – who sends the goods back to another EU member State and reclaims the VAT charged, exporting at a zero VAT rate.
- Timur Mehmet (DOB 13.04.73), one of the main players, of 118 Woodland Way, Winchmore Hill, London, was sentenced to eight years in prison. He was disqualified from being a company director for 12 years. Timur Mehmet was convicted and sentenced in his absence and is currently ‘on the run’. A European arrest warrant has been issued.
T Mehmet was an employee of Globalactive and M Mehmet’s nephew and acted as a ‘broker’ (or shipper) – who sends the goods back to another EU member State and reclaims the VAT charged, exporting at a zero VAT rate.
Issued by HM Revenue & Customs Press Office
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