Dundee businessman jailed for multimillion pound VAT fraud
- 11 January 2013
- From the section Tayside and Central Scotland
A Dundee businessman has been jailed for nine years for a multi-million pound VAT fraud scheme.
Shahid Ramzan, from Broughty Ferry, was found guilty of five charges, including evading, either alone or with others, VAT payments of £5,611,839 between October 2002 and July 2004.
The 40-year-old was also found guilty of transferring or hiding "criminal property" of £20,610,213.
Judge Lord Brailsford said the offences were "serious crimes of dishonesty".
At his trial, the High Court in Edinburgh was told Ramzan, 40, began trading from a bedroom at his home in Broughty Ferry, with only a telephone, a fax machine and a computer to access the internet.
Prosecutors claimed his international dealing was only a cover for his real business, exploiting loopholes in VAT regulations, along with others who were using Missing Trader Intra Community (MTIC) VAT fraud.
Ramzan even set up front companies as a way of exporting his "earnings" from Scotland.
The companies were legally Spanish, had addresses in Barcelona and Madrid on the stationery but operated from Dundee with bank accounts in Kilmarnock.
Experts had explained to the court how MTIC fraud worked.
The scam was to set up a chain of deals which was difficult to follow. An importer would buy goods without VAT because they came from another European Union country.
When re-sold in the UK, the new customer would pay VAT but the importer would not hand it over to the authorities.
After passing from one so-called "buffer" company to another, a broker would finally export the same items, claiming a VAT refund. By then, the original "missing trader" would have disappeared, gone bust, or been revealed as a bogus company which had hijacked the VAT details of a genuine trader.
Customs and Excise would be out of pocket, with little or no chance of recovering the VAT to match the refund.
Ramzan's companies played the parts of "buffer" and "missing trader" at different times during his scams.
Mobile phones and computer parts were favourite items for dodgy traders, the trial heard.
High value consignments took up little space and incurred lower carriage and storage costs.
Sometimes the same box of mobile phones might appear to change hands half a dozen times a day without moving from the same spot on the warehouse floor of a freight forwarder.
Ramzan had originally been accused of hiding close to £115m until defence QC Murray Macara successfully argued that only the VAT should appear in the charge and not the total turnover.
Passing sentence at the High Court in Glasgow, Lord Brailsford told Ramzan he had carried out "serious crimes of dishonesty" that required intelligence to plan, organise and execute fraudulent schemes.
He said: "These fraudulent schemes were carried out over a prolonged period of time between October 2002 and July 2004.
"As a result of this conduct the public purse has been deprived of revenue which it was entitled to."
He added: "You do not in the main accept responsibility for these offences and further consider that others should be prosecuted."