Preston, mastermind of one of the UK’s biggest tax frauds, sentenced

The mastermind of a fake designer clothing scam who committed one of the UK’s biggest carousel tax frauds has been jailed in his absence.

Arif Patel and his gang attempted to steal £97m via VAT refund claims on bogus exports of textiles and phones.

He also sold counterfeit clothing that would have been worth £50 million if genuine.

Patel, 55, who is originally from Preston and is now believed to be a fugitive in Dubai, was sentenced at Chester Crown Court to 20 years.

Her Majesty’s Revenue and Customs (HMRC) said the fraud was uncovered after a joint investigation involving customs and Lancashire police over more than 10 years.

It came undone when dozens of containers full of fake designer clothes were detained at UK ports including Liverpool, Southampton and Felixstowe.

Subsequent distribution to UK traders was confirmed when a delivery to a Glasgow wholesaler was intercepted by police.

Patel was pleaded guilty after a 14-week trial for a variety of crimes including false accounting, conspiracy to deceive government revenue, conspiracy to sell counterfeit products and money laundering.

The court heard that he used the proceeds of the fraud to buy property in Preston and London through offshore bank accounts, with HMRC saying Patel’s Preston-based company, Faisaltex Ltd, was at the center of his criminal dealings.

It resorted to bulk imports of counterfeit clothing in 2004, as well as fraudulent VAT refund claims on allegedly high-value goods and threads.

Co-defendant Mohamed Jaffar Ali, 58, of Dubai, was jailed for 14 years in his absence after being found guilty of three counts of conspiring to commit fraud by failing to disclose information under the Fraud Act 2006.

Ali also laundered the proceeds through bank accounts he opened in Dubai and abroad, HMRC said.

Like Patel, he is also wanted by the police.

Following the sentencing, Andrew Fox, Chief Prosecutor for the Crown Prosecution Service (CPS), said: “The sentences of Arif Patel and Mohamed Jaffar Ali successfully conclude this part of a huge investigation and prosecution case against an organized criminal group, involved in counterfeit clothing, fraudulent VAT claims and money laundering.

“The cost to the public purse was in the tens of millions, money that could have been used for essential public services in the NHS, social care and education.

“CPS will now initiate forfeiture proceedings against the defendants, to prevent them from enjoying the benefits of their criminal enterprise.”

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