Walsall company boss tried £320k VAT fraud to pay off debts
A company director faked records and invoices in a £320,000 VAT scam to pay off his own debts.
Muazam Sarfaraz set up Walsall-based Bullioncard to manage the new debit card and customer identity system for the scrap metal trade, but went on to use it to commit tax fraud.
The 37-year-old set up the company in March 2013 and tried to register for VAT in May the following year using his father's name.
But Her Majesty's Revenue and Customs (HMRC) rejected the registration as all of the contact and accounts for the firm were in Sarfaraz’s name.
He then became a sole proprietor of the company and filed his first VAT claim for a £320,679.69 repayment in May 2015.
Investigators discovered the company traded a little when first set up and had three employees but there was no evidence of any substantial business activity.
When he was arrested in June 2016, Sarfaraz initially denied any fraudulent activity but then admitted falsifying invoices and faking records to support the claim.
He admitted inflating the company income, overstating a loan from a local charity and falsifying bank statements, business records and invoices from a supplier.
He said he committed the fraud to pay off personal debts, including private school fees for his children and debts accrued running his business.
Richard Young, Assistant Director, Fraud Investigation Service, HMRC, said: "Sarfaraz abused the tax system, attempting to commit fraud intentionally, to pay off debts and to support a lifestyle beyond his means.
"He knew he would be depriving public services of vital funding and giving his company an unfair financial advantage over his honest competitors. Now he is paying the price with a criminal record."
Sarfaraz of Waterfront Way, Walsall, pleaded guilty to being knowingly concerned in the fraudulent evasion of VAT and making or supplying of articles for the use in fraud contrary.
He was sentenced at Wolverhampton Crown Court on July 20 to 20 months in prison, suspended for two years, ordered to carry out 200 hours of unpaid work and was banned from being a company director in the UK for 15 years.
