Gang jailed in £176m mobile phone VAT fraud

A 15-strong criminal gang, who attempted to defraud more than £176m in VAT through complex mobile phone trading scams, has been sentenced at Kingston Crown Court.

Dilawar Ravjani, the ring leader of the gang, was jailed for 17 years – the longest sentence ever given to an individual in the UK for this type of fraud.

The ‘missing trader’ scam operated through a number of different companies set up by Ravjani and his family, and has played out across five linked trials.

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Comments
davidwinch's picture

The 17 year sentence    1 thanks

davidwinch | | Permalink

It will be interesting to see if there is an appeal against the 17 year sentence in this case.

Dilawar Ravjani was convicted of the common law offence of "Conspiracy to cheat the Public Revenue".  Had he been convicted of, say, an offence under s72 VAT Act 1994 the maximum penalty would have been 7 years imprisonment.  For fraud or theft the maximum sentence would have been 10 years.  The maximum sentence for money laundering is 14 years.  But the maximum for the common law offence of 'cheat' is life imprisonment (in effect there is no maximum sentence for the common law offence - it is not an offence created by any statute law).

Details of the sentences in this case are HERE.

Generally in the past fraud and financial crime has received lighter sentences than, for example, crimes of violence or drug trafficking offences.  For that reason it could be argued that a 'clever' criminal could regard financial crime (such as serious tax fraud) as a way to make more money with less risk than, say, drug trafficking or walking into a bank with a shotgun.

The implementation of the draconian confiscation regime could be seen as an attempt to deal with financial crime - and sentences of well in excess of 10 years might be seen as another attempt to deal with the problem.

The HMRC website notes: "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."

David

davidwinch's picture

Blog article

davidwinch | | Permalink

I have now posted an article on my blog about the 17 year sentence in this case - HERE.

David

HMRC grammar

mikewhit | | Permalink

"are now underway " ... "under way" (two words)

The Minion's picture

i would love to know

The Minion | | Permalink

how they managed to get the thing registered in the first place.

One of our clients tried to set up a mobile phone shop but was refused because he did not have a supply contract with a provider (who wouldnt supply him unless he had a VAT registration number).

He had the staff, premises and funding in place but HMC still wouldnt believe him.

Eventually our client dropped the idea and went for a casino instead ( no joke), months later we had a call from a member of HMRC saying that he was standing outside the proposed shop premises on a verification visit and was demanding to know why the shop wasnt actually a mobile phone shop.

It is difficult not to sound patronising when you are trying to explain to someone that the shop couldnt open, because it couldnt get a supply contract, because HMRC wouldnt give them a VAT number - as pointed out in ALL the previous correspondence.

I assume these guys registered as farmers or something.

davidwinch's picture

Getting VAT registered

davidwinch | | Permalink

One of the companies at the centre of the fraud was incorporated in 2001 - and presumably registered for VAT ten years ago when HMRC were not so fussy about whom they registered!

David

davidwinch's picture

Sentencing and losses suffered

davidwinch | | Permalink

The losses suffered by HMRC in this VAT fraud were put at £107m - which of course is no small beer.  The ringleader got 17 years.

Now in the UBS fraud the 'rogue trader' is said to have cost the bank £1,400m - and has been sentenced to 7 years.

Of course the amount lost by the 'victim' is not the only measure of the seriousness of a crime - but it is an interesting statistic!

David

davidwinch's picture

Appeal against 17 year sentence

davidwinch | | Permalink

Mr Ravjani did appeal against the 17 year sentence - but the Court of Appeal have upheld it.

David