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A case of VAT Fraud - £151 million lost without trace

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15th Aug 2005
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Suspected VAT fraudster Nasser Ahmed is alleged to have made around £156 million in four years pocketing output VAT on sales of computer chips. Last February he leapt from the dock at Bristol Crown Court, minutes before the jury reached its guilty verdict. He was sentenced in his absence on that occasion to six years imprisonment, and is still at large.

In Gloucester Crown Court on Wednesday, HMRC applied for a confiscation order for a small proportion of his alleged assets. It was estimated that he had made around £156 million in four years pocketing output VAT on sales of computer chips.

Nasser had been importing computer chips from Luxembourg without paying VAT, and subsequently selling the chips in the UK, without declaring the output VAT charged. It was a highly lucrative practice. He had set up a network of companies with his partner Urfan Ahmed, from his base in Bedminster, Bristol. Urfan has admitted one charge of cheating and one of furnishing a false document; he was sentenced to 21 months in prison, suspended for two years.

At the height of the scam, Nasser had apparently managed to bank £500,000 per day for a seven-week period. Funds were not only paid into the Royal Bank of Scotland, but also to bank accounts in the Cayman Island and Spain.

Crown prosecutors nevertheless appear to have had difficulty tracing the funds, and of the estimated millions, HMRC only applied for, and were granted a confiscation order of £5.1 million. This included his house, a cash stash (in his bedroom) of £52,000, presumably for emergencies, and three cars.

If he does not hand over his assets to the authorities, he will have to serve a further ten years in prison. This is on the assumption that he is subsequently apprehended.
Judge Carol Hagen said, 'At first blush the figure that the Crown submits does seem astronomical but when one looks at the evidence, and in particular one Royal Bank of Scotland account, one sees how that figure is reached.'

"Blush" is an understatement; HMRC must be red in the face for only managing to trace 3% of the lost duties, and it comes as no surprise in the light of the latest trade figures, which suggest wide scale VAT fraud. Pocketing output tax has it seems become something of a national pasttime.

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