A four-year investigation by HM Revenue and Customs (HMRC) revealed that ringleaders Ibbtsam Ul Hamid, 40, from Shipley, Zuwal Qarnain Sajawal, 40, from Birmingham and Nadeem Noor, 44, from Smethwick had orchestrated a highly organised, large-scale fraud. Ul Hamid used his knowledge as a qualified chartered accountant to exploit the VAT system and defraud the public purse.
In a systematic and deliberate attack on the tax system, the gang created fake companies, produced bogus invoices and manipulated bank statements to claim VAT repayments they were not entitled to.
The investigation identified that, between November 2007 and March 2012, the gang set up and operated 20 companies supposedly supplying computer supplies or electrical fittings for new build properties that didn’t actually exist.
The ringleaders recruited further members to the criminal enterprise who played a crucial role, acting as fronts for the fake companies and facilitating the laundering of the proceeds of the fraud. The bank accounts set up for each company showed no legitimate trading activity with the majority of the VAT repayments from HMRC being withdrawn in cash. The gang submitted over 80 fraudulent VAT repayment claims totalling £2.6 million.
The gang spent the proceeds of their fraud on extravagant holidays, high-performance vehicles and luxury goods and furnishings for their homes.
Richard Young, Assistant Director, Fraud Investigation Services, HMRC, said:
“Ul Hamid, Sajawal and Noor were at the forefront of a highly sophisticated fraud, enlisting the support of 20 others. The defendants set up bogus companies and faked invoices to give the impression of legitimate business activity, purely to pocket the VAT repayments to finance their lavish lifestyles.
“Had HMRC not stopped them, they could have attempted to steal millions more in a deliberate attack on the public purse but they are now facing over 50 years in jail as a result of their fraud.”
Elizabeth Bailey, Senior District Crown Prosecutor in CPS Specialist Fraud said:
“This group set up fake companies with the sole purpose of fraudulently claiming over £2m in VAT repayment claims from the Revenue.”
“I hope the sentences handed down in this case reinforce the message that if you manipulate the tax system and damage society for your own gain, you risk prosecution and imprisonment.”
The defendants appeared at either Birmingham Crown Court or Stafford Crown Court between September 2014 and June 2015. Twelve entered guilty pleas either prior to trial or immediately before it, but the remainder were found guilty in three separate trials. Reporting restrictions, which were imposed due to outstanding appeals that were subsequently dismissed, have now been lifted.
In his sentencing remarks, His Honour Judge Chambers QC, noted that the enterprise was, highly organised and fraudulent from the outset, involving an elaborate back-up system to deceive HMRC officers.The professionalism of the HMRC investigative team was of the highest calibre.
Confiscation proceedings to recover their criminal profits are ongoing.