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£37.5m VAT fraud gang get 74 years

A fraud gang, including nine men from the West Midlands, has been jailed for cheating £37.5 million in tax payments.

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A fraud gang, including nine men from the West Midlands, has been jailed for cheating £37.5 million in tax payments.

The 21-strong gang used highly sophisticated methods to cheat the VAT system through the import and export of computer chips. They were brought to justice following an exhaustive investigation by customs officers, which started in 2003, leading to sentences totalling 74 years.

The cases were dealt with separately in seven interlinked trials and retrials, codenamed Operation Devout.

The details can be revealed for the first time today following the sentencing of the final gang member Harbans Singh Kohli, aged 47, of Ealing, London, who was jailed for two and a half years at Birmingham Crown Court yesterday.

Adrian Farley, assistant director of criminal investigation for Revenue and Customs, said today: "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.

"However, each defendant knew the purpose of the payments they received were for money laundering and not legitimate trade." Confiscation proceedings to reclaim the proceeds of the crime are now being pursued.

The men, from across the West Midlands and Staffordshire, set up a complex chain of VAT registered companies in the UK and abroad that never actually existed. One, called Shivani (Limited), was an anagram of I Vanish. Some of the money they made is believed to have been invested in a third of a ton of gold bullion, substantial property in Dubai and a luxury flat near Harrods.

The conspiracy involved the import of computer chips, 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 Customs 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.

Criminal investigators from HMRC exposed the fraud which has resulted. Details can only be released now with the lifting of reporting restrictions on the case.

These are the nine Midland fraudsters involved in the £37.5 million scam. The other 12 were from Buckinghamshire, Middlesex, London and Essex

* Sukhdave Singh More, 45, of Walsingham Street, Walsall, was jailed for nine months for laundering £165,000. He was disqualified from being a company director for five years. More headed a company called Rapid Distribution Ltd.

* Stephen Farrell, aged 51, of The Tryst, Birmingham Road, Lickey End, Bromsgrove, Worcestershire. He was jailed for four years and banned from being a company director for 12 years.

Farrell was involved in G W 224 Ltd, of Birmingham. The VAT registered business was 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, 49, of Fox Lane, Alrewas, Burton upon Trent, Staffordshire, was sentenced to five years. He was disqualified from being a company director for 12 years. The Court of Appeal later reduced his sentence to three years, six months. He was also involved in G W 224 Ltd.

* Jaswender Singh Chahal, 51, of Hudson Road, Handsworth Wood, Birmingham, was jailed for 18 months for laundering £461,000. He ran two companies Acorn Trading and Woodland Supplies.

* Stuart Emilios Angelides, 44, of Lady Byron Lane, Knowle, Solihull, was given 18 months (suspended for 18 months) for laundering £150,000. He was said to be an organiser rather than a front-line launderer.

* Peter Newey, 40, of Exhall Close, Redditch. Sentenced to nine months (suspended for 18 months) for laundering £53,000. He headed a company called Betta Solutions Ltd.

* Christopher Traverse, 68, of Streetsbrook Road, Solihull, was given two years - 18 months for laundering £132,957 and another six months to run consecutively for absconding . He fled and was convicted and sentenced in his absence. He was detained on March 30 this year by French police, extradited to the UK on April 13 and sentenced the next day. He headed a company called NCT Training Ltd.

* Tariq Kamal, 44, of Stuarts Road, Stechford, Birmingham, was sentenced to 12 months, suspended for 18 months, for laundering £53,000. With Newey he headed Betta Solutions Ltd.

* Pravin Jogia, 62, of Oak Tree Close, Bentley Heath, Solihull, was jailed for 3.5 years.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'.

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