A 15-strong criminal gang, who attempted to defraud in excess of £176m in VAT through complex mobile phone trading scams, has been sentenced.
The ring leader, Dilawar Ravjani (34), was jailed for 17 years – the longest sentence ever given to an individual in the UK for this type of fraud.
The gang claimed to have sold four million mobile phones worth £1.7bn. However, in many cases the phones did not exist, including 250,000 which had not yet been launched in the UK. In an attempt to make the trade appear legitimate, over 5,700 fake business transactions were created in order to claim large amounts of VAT. One company run by Ravjani, Future Communications, embarked on a complex scheme to defraud by positioning itself in trading chains where it exported phones from a chain that started from a missing trader. At the same time it also acted as an importer allowing other traders such as Unique Distribution – a sister company – to seek significant VAT payments.
The investigation by HM Revenue & Customs (HMRC) officers started in May 2006 when HMRC became aware of the fraud. The first arrests were made within three weeks and prevented the attempted £176m fraud. HMRC also prevented the payment of fraudulent VAT repayment claims totalling £109m submitted by companies linked to the scam.
Reporting restrictions on all five linked trials have now been lifted following the final defendant’s plea last month.
Chris Martin, HMRC Assistant Director of Criminal Investigation said:
“Fraud on this scale causes immense damage to the tax revenues of the UK and the European Union. This was a complex and well-organised fraud which made a huge profit for the gang at the expense of UK taxpayers, but the dedication and techniques used by HMRC officers in this investigation resulted in the successful prosecution and convictions of these criminals. We will now seek to recover the proceeds of this crime.”
The proceeds from the fraud were laundered using another Ravjani company called Property and Management Services Ltd – run by Ravjani’s sister, Roshan Hussain – and using various methods including an offshore bank, car sales businesses, a property investment company and a loans company.
During the arrests, officers seized around £170,000 in cash, including £47,000 which was found in carrier bags in the boot of luxury car owned by John McFarnon, a director of Unique Distribution.
Concluding the final trial at Kingston Crown Court, His Honour Judge Birts QC said:
“I would like to pay tribute to, and highly commend, the excellent and dedicated investigatory work of the two officers.
“I had the opportunity of observing the result of this work at close quarters for very many months and I’ve been very impressed, not only by integrity for the work – which I would expect – but also by the diligence and fairness shown during the process and dedication of the team.”
Confiscation proceedings are now underway to recover any assets the gang members received as a result of this crime. The actual tax loss totalled £107m.
Notes for editors 1. Background:
The fraud involved the VAT-free import and export of mobile phones from EU countries. The gang created false paperwork relating to the alleged importation, sale and export of phones. The phones were purported to have been sold on in the UK, with VAT added on, through a chain of companies (known as buffers) and invoices would be issued in order to perpetrate the fraud. The gang would then claim that the phones had been exported back to EU countries. This was facilitated by a corrupt freight forwarding company who provided the false paperwork for the alleged transport of the phones. The exporter would then claim a VAT repayment based on the VAT alleged to have been paid on the purchase of the goods – although this was never paid in the first place.
Future Communications (UK) Ltd was part of the Ravjani Corporation Innovative Global Business Group Ltd (IGB) and at the centre of the fraud. It traded from Commercial House, Honeypot Lane, Stanmore, Middlesex.
Unique Distribution Ltd – sister company of Future Communications (UK) Ltd also part of the Ravjani Corporation Innovative Global Business Group Ltd (IGB) and at the centre of the fraud - traded from Suffolk Way, Abingdon, Oxfordshire. Roshan Hussain was a director of the company. There were over 20 companies in the Ravjani Corporation which was owned by Haidar Ravjani and controlled by his son Dilawar Ravjani and daughter Roshan Hussain. The companies were involved in car sales, buying and selling of mobile phones and property investment.
2. Defendants details:
Dilawar Ravjani (DOB: 10.10.1977), of Dubai and 23 Uxbridge Road, Stanmore, Middlesex. He was the organiser. He was a director of Future Communications (UK) Ltd and controlled Unique Distribution Ltd – family businesses operating from offices in Stanmore, Middlesex and Abingdon, Oxfordshire. He was found guilty of Conspiracy to Cheat the Public Revenue and sentenced on 20 June 2011 at Kingston Crown Court to 17 years imprisonment. He was also disqualified from being a company director for 15 years.
Tamraz Riaz (DOB: 12.08.1976) of 34 Plumpton Road, Wakefield, Yorkshire, a family friend of the Ravjanis and Dilawar Ravjani’s right hand man. He was manager of the Ravjani companies, phone trader and ran the car sales businesses in Stanmore and Wakefield – Prestige Cars and Crystal Cars Ltd. He laundered the proceeds of the fraud through the car sales business Crystal Cars Ltd. He was found guilty of Conspiracy to Cheat the Public Revenue and sentenced on 20 June 2011 at Kingston Crown Court to 13 years imprisonment. He was also disqualified from being a company director for 10 years.
Zafar Chishti (DOB: 28.07.1979) of Pakistan and formerly of St James Road, Watford; financial director of the Ravjani companies, was found guilty of Conspiracy to Cheat the Public Revenue and sentenced in his absence on 20 June 2011 at Kingston Crown Court to 11 years imprisonment . He was also sentenced to one year imprisonment for attempting to pervert the course of justice and disqualified from being a company director for 10 years. The sentences are to run consecutively. Chishti was financial director of all the companies in the Innovative Global Business Group Ltd. He authorised the fraudulent trade in mobile phones including the deals between Future Communications (UK) Ltd and Unique Distribution Ltd.
Rajesh Gathani (DOB: 17.04.1965) of 5 Lime Tree Court, Pinner, Middlesex; phone trader for the Ravjani companies, pleaded guilty to Conspiracy to Cheat the Public Revenue and sentenced on 20 June 2011 at Kingston Crown Court to eight years imprisonment. He was also disqualified from being a company director for eight years. He was the sales manager of Future Communications (UK) Ltd and Unique Distribution Ltd and worked from the office in Stanmore.
Roshan Hussain, (DOB: 23.04.1968) of Dubai, formerly of 40 Parkside, Dollis Hill, North West London, was found guilty of attempting to Pervert the Course of Justice and sentenced on 19 October 2011 at Kingston Crown Court to 12 months imprisonment. Together with her brother Dilawar Ravjani, Hussain was a director of the Ravjani companies and she ran the property investment company, Property Management and Services Ltd, which received £19.5m from Future Communications (UK) Ltd – believed to be part of the fraud. She was a secretary of Future Communications (UK) Ltd and director of Unique Distribution Ltd alongside John McFarnon.
Paul Smith (DOB: 20.03.1969) of 32 Hawthorne Avenue, Trent Vale, Stoke on Trent, Staffs; employee of a freight company involved in the fraud, pleaded guilty to being knowingly concerned in the fraudulent evasion of Value Added Tax (VAT) and was sentenced on 27 January 2012 at Kingston Crown Court to 12 months imprisonment suspended for two years. He was also ordered to undertake 240 hours unpaid community service. Smith was a manager at Boston Freight based in Belgium – a freight forwarding company owned by Marshall Boston. He signed and provided paperwork to justify the alleged movement of phone consignments between the UK and EU. Prior to working for Marshall Boston he worked for another gang member’s freight forwarding company (A1 Logistics & Freight Ltd).
Lee Sellers (DOB: 25.10.1969) of Whitehurst Lane, Dilhorne, Staffs, owner of freight company A1 Logistics & Freight Ltd, based in Whitehurst Lane, Dilhorne, Staffs; pleaded guilty to Fraudulent Trading under the Companies Act 1985 and was sentenced on 27 January 2012 at Kingston Crown Court to two and a half years imprisonment. He was also disqualified from being a company director for five years. As a freight forwarder, he provided fake paperwork in an attempt to legitimise the chain of transactions and exportation of phones back to the EU, mainly to Boston Freight.
John McFarnon (DOB: 23.07.1955) of Bridge Cottage, Hannington Wick, Wilts, SN6 7RT; former Managing Director of Unique Distribution Ltd, pleaded guilty to Fraudulent Trading under the Companies Act 1985 on 12 September 2011. He was sentenced at Kingston Crown Court to three years imprisonment on 19 October 2011 and disqualified from being a company director for five years. He was involved in the day to day running of Unique Distribution Ltd including phone trading and received a £50,000 cash bonus authorised by Roshan Hussain for his good work.
John Conroy (DOB: 10.02.1962) of The Country Club, Marbella, Malaga, Spain, formerly of Beaconsfield, Bucks, was a covert backer and shadow director of Unique Distribution Ltd. He pleaded guilty to Fraudulent Trading under the Companies Act 1985 on 12 September 2011. He was sentenced at Kingston Crown Court to three years imprisonment on 19 October 2011 and disqualified from being a company director for five years. Although Conroy does not appear on Unique Distribution Ltd’s paperwork, he is believed to have a financial interest in the company and made decisions as to how it operated. He was aware of the fraud.
Ahmar Pervez Bhatti (DOB: 22.12.1975) of 3 Park Drive, Bradford. He pleaded guilty to money laundering under Section 327 Proceeds of Crime Act 2002 on 23 February 2012. He laundered £116,000 through his bank account. £30,000 was paid to two of the Ravjani companies and the remainder was used as living expenses. He was sentenced at Kingston Crown Court to 12 months imprisonment suspended for two years and ordered to undertake 180 hours unpaid Community Service on 8 June 2012.
Waqar Bhatti (DOB: 10.07.1979) of 2 Cranbourne Close, Slough, Berks; ran a company which traded with Future Communications and claimed £1.1m in VAT repayments. He pleaded guilty to Fraudulent Trading and sentenced at Kingston Crown Court to 12 months imprisonment suspended for 12 months on 27 April 2012. He was also ordered to undertake 150 hours unpaid Community Service.
Mohammed Najeeb (also known as Sumair Ghazanfar) pleaded guilty in December 2011 to possession and use of false identity documents under the Counterfeit and Forgery Act 1981. He used a false passport to set up a European Union Company under the control of Ravjani. He was sentenced at Kingston Crown Court to 12 months imprisonment suspended for two years on 9 March 2012. He was also ordered to undertake 100 hours unpaid Community Service. He visited solicitors to establish companies in the EU under the direction of Umar Khan Nazir.
Marshall Boston (DOB: 20.04.1966) of Hugo Way, Loggerheads, Market Drayton, Shropshire, owner of Belgium based freight company, Boston Freight, pleaded guilty to being knowingly concerned in the fraudulent evasion of Value Added Tax (VAT) under section 72 of the VAT Act and was sentenced at Kingston Crown Court to 2 years imprisonment, on 10 July 2012. He was also disqualified from being a company director for five years. His company provided fake paperwork in an attempt to legitimise the exportation of phones back to the EU.
3. The attempted VAT fraud was in excess of £176m.
4. Reporting restrictions have been in place until the conclusion of the five trials in this case.
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