Arif Patel, an Indian-origin individual, has been sentenced to 20 years in prison by a UK court for orchestrating a massive tax fraud scheme involving counterfeit designer clothing. The scam aimed to defraud the government of approximately GBP 97 million through false VAT repayment claims on fabricated exports of textiles and mobile phones. Patel, along with his criminal gang, devised an intricate “carousel” tax fraud, which the British tax department has described as one of the largest in the country’s history.
After a 14-week trial at Chester Crown Court, Patel, aged 55, was found guilty of several charges, including false accounting, conspiracy to cheat the public revenue, onward sale of counterfeit clothing, and money laundering. The investigation into Patel’s fraudulent activities was a joint effort between the local Lancashire police and His Majesty’s Revenue and Customs (HMRC), the UK tax department.
The fraudulent scheme involved importing and selling counterfeit clothes, which would have amounted to at least GBP 50 million if genuine. The illicit proceeds from the sales were then utilized to acquire properties across Preston in northern England and London through offshore bank accounts. Patel’s lavish lifestyle, funded by these criminal activities, was at the expense of law-abiding citizens. Richard Las, Director of the Fraud Investigation Service at HMRC, emphasized that tax crimes like this not only harm individuals but also deprive essential public services, such as the National Health Service (NHS), of much-needed funding.
In addition to Arif Patel, his accomplice, 58-year-old Mohamed Jaffar Ali from Dubai, was also found guilty of conspiracy to cheat HMRC and money laundering. Ali has been sentenced to 11 years’ imprisonment. Eamonn O’Neill, Assistant Director of the Fraud Investigation Service at HMRC, acknowledged the severity of their crimes and the significance of their convictions in combating carousel tax fraud.
This case marks the culmination of a series of trials spanning from 2011 to 2023, resulting in the conviction and sentencing of a total of 26 members of the criminal empire. The combined jail terms handed down to the individuals involved amount to 147 years and seven months. Furthermore, over GBP 78 million worth of the gang’s assets have been frozen, and efforts are underway to recover these ill-gotten gains.
The HMRC highlighted that Patel’s criminal enterprise relied on a network of individuals spread across the UK, including professional enablers. Two chartered accountants, Anil Hindocha and Yogesh Patel, were identified as being part of this network. Hindocha, aged 69, from Preston, was previously sentenced to 12 years and 10 months in 2014 for false accounting, conspiracy to cheat the tax department, and money laundering. Yogesh Patel, aged 66, from Aylesbury, received a sentence of five years and seven months for the same offenses.
Moving forward, the Crown Prosecution Service (CPS) plans to pursue confiscation proceedings against the defendants to prevent them from enjoying the fruits of their criminal enterprise. The sentencing of Arif Patel and Mohamed Jaffar Ali serves as a significant deterrent against carousel tax fraud and reflects the UK authorities’ commitment to combatting financial crimes of such magnitude.
