Philip Cottrell BBC journalist in Spain Phil Cottrell Marbella / Philip Cottrell Spain Fraud in the Freelance Journalist association Marbella York, Nationwide

 15-strong criminal gang, who attempted to defraud in excess of 176m in VAT through complex mobile phone trading scams, has been sentenced. The ring leader, Dilawar Ravjani (34), was jailed for 17 years the longest sentence ever given to an individual in the UK for this type of fraud.

The gang claimed to have sold four million mobile phones worth 1.7bn. However, in many cases the phones did not exist, including 250,000 which had not yet been launched in the UK. In an attempt to make the trade appear legitimate, over 5,700 fake business transactions were created in order to claim large amounts of VAT. One company run by Ravjani, Future Communications, embarked on a complex scheme to defraud by positioning itself in trading chains where it exported phones from a chain that started from a missing trader. At the same time it also acted as an importer allowing other traders such as Unique Distribution a sister company to seek significant VAT payments.

The investigation by HM Revenue & Customs (HMRC) officers started in May 2006 when HMRC became aware of the fraud. The first arrests were made within three weeks and prevented the attempted 176m fraud. HMRC also prevented the payment of fraudulent VAT repayment claims totalling 109m submitted by companies linked to the scam.

Reporting restrictions on all five linked trials have now been lifted following the final defendants plea last month.


Chris Martin, HMRC Assistant Director of Criminal Investigation said:

Fraud on this scale causes immense damage to the tax revenues of the UK and the European Union. This was a complex and well-organised fraud which made a huge profit for the gang at the expense of UK taxpayers, but the dedication and techniques used by HMRC officers in this investigation resulted in the successful prosecution and convictions of these criminals. We will now seek to recover the proceeds of this crime.

The proceeds from the fraud were laundered using another Ravjani company called Property and Management Services Ltd run by Ravjanis sister, Roshan Hussain and using various methods including an offshore bank, car sales businesses, a property investment company and a loans company.

During the arrests, officers seized around 170,000 in cash, including 47,000 which was found in carrier bags in the boot of luxury car owned by John McFarnon, a director of Unique Distribution.

Concluding the final trial at Kingston Crown Court, His Honour Judge Birts QC said:

I would like to pay tribute to, and highly commend, the excellent and dedicated investigatory work of the two officers.

I had the opportunity of observing the result of this work at close quarters for very many months and Ive been very impressed, not only by integrity for the work which I would expect but also by the diligence and fairness shown during the process and dedication of the team.

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.