Shahid Ramzan, from Broughty Ferry, was found guilty of five charges, including evading 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.
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.
The companies were legally Spanish, had addresses in Barcelona and Madrid on the stationery but operated from Dundee with bank accounts in Kilmarnock.
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. 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.
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.
"As a result of this conduct the public purse has been deprived of revenue which it was entitled to."
Given the complex nature of these types of cases and the vast paper trail that can be created, businesses can easily find themselves subject to large scale fraud investigations, despite the fact that they may have acted honestly and in good faith.
It is therefore vital that businesses who find themselves this position seek specialised legal advice from the outset. Here at Stephensons Solicitors, we specialise in and represent clients facing charges involving all areas of serious fraud and business crime, including mortgage fraud, insurance fraud and investment fraud. We regularly represent client’s facing Proceeds of Crime (“POCA”) and confiscation and restraint proceedings in order to ensure client’s assets are protected.
By Adam Pennington