Two members of a criminal tax fraud gang have been ordered to pay a record £92.3 million to HM Revenue & Customs in what is the biggest ever compensation confiscation order secured by the tax office.
The gang were involved in fraud on a staggering scale and bought luxury houses in London, high performance cars and built blocks of flats in Dubai after stealing £37.5 million in a ‘missing trader’ VAT tax fraud. Some of the money they stole is believed to have been invested in a third of a tonne of gold bullion.
HM Revenue & Customs (HMRC) finally caught up with the two men who are currently serving seven year jail terms. Full reporting restrictions were previously in place during confiscation proceedings at Leicester Crown Court during this case which means the extraordinary story is only now coming to light.
The pair of criminals will face a further ten years in prison each if they fail to abide by the £92.3 million compensation order.
HMRC Assistant Director of Criminal Investigation Richard Meadows said:
“This is the largest ever confiscation order secured by Revenue & Customs at the end of one of our most complicated investigations. I believe it to be one of the largest confiscation orders in the UK to date.
“We are determined to bring to justice the criminals behind this type of fraud and take away the proceeds of their crime.
“We have worked very closely with the West Midlands Regional Asset Recovery Team (RART) and law enforcement agencies across the world to bring this case to a successful conclusion.”
Syed Ahmed of Buckinghamshire and Shakeel Ahmad of Middlesex, both currently serving seven year jail terms, were each ordered to repay £92.3 million within two months or face an additional ten years in jail as well as still having to repay the money.
The judge stated the joint minimum payable by both defendants is £92.3 million.
HMRC Officers have already restrained high value assets including a luxury flat in Knightsbridge worth £4.5 million, two apartment tower blocks in Dubai worth £80 million and high performance fast cars including a Ferrari 360 Modena convertible.
His Honour Lord Justice Richard Flaux, speaking in court, said:
“You are both complete liars and devious. You are adept at using others in an attempt to make your activities legitimate, creating a smokescreen to hide the value of your assets and conceal this from HMRC.”
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 (CPU).
The gang used highly complex chains of VAT registered companies both here and abroad to steal £37.5 million.
The final defendant of the 21 strong crime gang was sentenced last month and ended one of the most complex investigations undertaken by HMRC which included seven trials and retrials. In total the gang were jailed for 74 years.
The conspiracy involved the import of CPUs mainly from Ireland VAT free. The goods would then be sold on 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.
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