Arif Patel, 57, originally from Preston but now living in Dubai, attempted to steal £97m through false VAT repayment claims on sham exports of textiles and mobile phones. His gang also imported and sold counterfeit clothing worth at least £50m, had the goods been genuine.

The proceeds funded a portfolio of commercial and residential properties across Preston, London and overseas, purchased through offshore accounts and companies. Patel also held assets in Morocco, the UAE, Saudi Arabia and Turkey.

At Chester Crown Court last week, a judge ruled that property worth more than £90m, along with Patel’s Ferrari 575 Superamerica, must be sold. The proceeds will be returned to the public purse.

Patel and his financial enabler, Mohamed Jaffar Ali, 61, of Dubai, were found guilty in their absence of fraud and money laundering after a 14-week trial in 2023. Patel fled to Dubai in 2011 and has not returned to the UK. Both men were sentenced in their absence to a total of 31 years in prison.

The convictions followed a joint investigation by HM Revenue & Customs (HMRC) and Lancashire Police, which has already secured jail terms totalling more than 116 years for 24 other members of the crime group.

Richard Las, Director of HMRC’s Fraud Investigation Service, said Patel had “lived a lavish lifestyle at the expense of the law-abiding majority” but would now lose everything. “Tens of millions of pounds of stolen money will now go back to directly fund public services,” he said.

Assistant Chief Constable Mark Winstanley of Lancashire Constabulary described Patel as the head of a Preston-based organised crime group whose “actions, motivated by greed, directly impacted on the taxpayer.” He confirmed that Ali has also been made subject to a confiscation order of £677,000.

Adrian Foster, Chief Crown Prosecutor for the CPS Proceeds of Crime division, said Patel must pay back £90m or face further prison time. “In the last five years, £478m has been recovered from CPS confiscation orders, ensuring that thousands of convicted criminals cannot profit from their offending,” he added.

Patel’s company, Faisaltex Ltd, was central to the fraud, acting as the hub for counterfeit clothing imports and false export claims. Ali played a key role by laundering the proceeds through offshore bank accounts. Faiseltex is still listed by Companies House.

Carousel fraud is a scam in which goods, usually small high voue ite,s like mobile phones, are repeatedly moved between bogus companies to create fake trading records, Criminals claim VAT repayments on VAT that was never paid.. Its heyday was around 20 years ago before HMRC spent years closing it down

A 55-page judgment by the First Tier Tribunal Tax Chamber disagreed with Lyca’s argument that VAT only became payable when the bundle data was used. Lyca had claimed that VAT could only be charged when the bundled services were actually used, rather than at the point of sale.

Face-value vouchers

Lyca argued that the Plan Bundles were face-value vouchers, categorizing them as retailer vouchers rather than single-purpose vouchers. The company maintained that the services within each Plan Bundle were supplied only as and when they were used. However, HMRC considered that those services were supplied when the relevant Plan Bundle was sold.

The VAT amounts being appealed covered the periods 2012 to 2015 (£6,319,980), 2015 to 2017 (£19,116,953), and 2019 (£25,707,095).

Lyca’s lawyers contended that activating a Plan Bundle was not chargeable to VAT because, at that time, it was not possible to identify the nature and extent of the services to be supplied under the Plan Bundle with sufficient specificity. They argued that, from the perspective of the consumer, there was functionally no difference between a Plan Bundle and the top-up credit which customers bought.

However, Tribunal Judge Tony Beare stated:

“The simple fact is that the entitlements under the Plan Bundles were not monetary amounts that could be used to acquire future services. Instead, they reflected the fact that services had already been supplied. For that reason, the entitlements did not represent the right to receive future services, as required by condition 2, but instead represented the product of services which had already been supplied.”

Read the full judgment HERE

HMRC staff working from home have lost £1 million worth of laptops and mobiles, according to new data released by the Telegraph.

The figures show that approximately 10 mobile phones and two laptops go missing each week and that. over the past three years, HMRC employees have reported 1,670 missing mobile phones and 334 lost laptops. Additionally, 95 phones and 562 laptops have been recorded as stolen during this period.

Apparently there is no information on the laptops. Data is all held on a central server that is accessed through the laptop. As soon as a laptop is ‘missing’ it is denied access even if passwords and secure key is used.

HMCR responded by saying itt takes ‘quick action’ to deactivate any device that has been logged as lost or stolen and investigates all security incidents

A spokesperson stated ‘Security and privacy are at the heart of our work as we deal with 10’s of millions of customers every year.

‘We take quick action to deactivate any lost or stolen devices and investigate all security incidents, taking steps to reduce future recurrences.’

A major mobile phone VAT fraudster has had her prison sentence doubled to more than 16 years for not repaying the money stolen. 

Sarah Panitzke (main picture above) was charged in 2010 with conspiracy to acquire criminal property for her role in a multi-million-pound VAT fraud. She was convicted and sentenced in her absence to eight years in August 2013 after absconding to Spain during her trial.

She was a lynchpin in a sophisticated multi-million-pound carousel fraud and laundered huge amounts of stolen VAT through offshore bank accounts.

HMRC said Panitzke (48) had been hiding in Andorra and Spain for the last nine years under an assumed identity.  She was re-captured in a joint HMRC Spanish Guardia Civil operation after she was identified in a village in the region of Tarragona and arrested while she walking her dogs i

The gang set up numerous businesses claiming to be legitimately importing and selling mobile phones. But the businesses were a front for a carousel fraud scheme to keep more than £20 million in VAT repayments. HMRC investigators uncovered a complex web of transactions used to launder stolen VAT money through bank accounts in the UK, Andorra, Dubai, Hong Kong, Switzerland, Portugal and the USA.

She and her 17 co-conspirators were given sentences totalling 135 years for the multi-million-pound VAT fraud.

At the City of London Magistrate’s Court today (Friday, March 23) she was sentenced to another nine years in prison after failing to repay a £2.45 million confiscation order made seven years. At that time she was given three months to pay the full amount or face an additional nine years in prison.

No money was ever been paid towards the confiscation order. The total amount due is now £3.78 million including interest which accrues £538 each day.

HMRC Assistant Director, Fraud Investigation Service Nicol Sheppard said “

Our work doesn’t stop at conviction. We always look to recover the proceeds of crime. Panitzke was part of a criminal gang that stole millions of pounds of taxpayers’ money and deprived our public services of vital funding. She failed to repay the money she stole and now faces even more time behind bars, and still owes the money. We encourage anyone who has information about a tax crime to report it to HMRC online. Search ‘Report Fraud HMRC’ on GOV.UK.”

True Telecom told staff there will be dozens of redundancies in its sales and operation department in Crossways Business Park, Dartford. The telecommunications company also plans to go into administration following a HM Revenue and Customs announcement of court action.

The redundancies at Dartford follow a petition by HMRC calling for it to wind up operations as it suggests True Telecom owes it money. Speaking to Mobile News in January, staff head count stood at 100.

This is off the back of an £85,000 fine last month for misleading calls over a two-year period, supposedly giving the impression that True Telecom staff were from BT Openreach while withholding numbers.

With 201 complaints to the Information Commission’s Office, True Telecom came under fire from those requesting they not be contacted.

The telecommunications company was found to be in breach of the Privacy and Electronic Communications Regulations.

The ICO’s head of enforcement Steve Eckersley said: “The rules around nuisance calls are clear. There’s no excuse for making marketing calls to people who have explicitly asked not to receive them.”

True Telecom director Mark Baines told Kent Online he will fight the case: “We’re looking to go into administration and are confident we can manage the company through that process. At the moment it’s business as usual.”

Mobile News approached True Telecom for further comment.

Ethnic MVNO Lycamobile faces being struck off the UK companies register after failing to file accounts for 2015, according to Companies House.

The company is allegedly facing a tax bill of up to £9.5 million from HMRC for unpaid taxes, reports in The Guardian claim, but now the firm has also missed an accounting deadline by over two months.

If struck off, the MVNO would be forced to set up as a new company in order to operate in the UK.

The report claims Companies House has sent two warning letters to the MVNO. The next stage would see it listed for late filing in the London Gazette next month, starting a two month ultimatum period. If Lyca fails to pay during that time, it could be struck off.

The news comes just months after an investigation from Buzzfeed News raised serious questions over Lycamobile’s “deeply suspicious” cash practices.

The investigation found Lyca employees “hundreds of thousands of pounds” in rucksacks at post offices across London every day. Lycamobile denied any wrongdoing.

Mobile News contacted Lycamobile for a response about its tax affairs and is awaiting a response from the MVNO.

Four men have been sentenced to over 27 years in prison for their part in a £28 million “missing trader” fraud case involving mobile phones and computer chips.

The gang traded under a Kent-based company called Amber Communications Management (ACM)*, importing products to the UK from Europe and the US. However, they failed to inform UK authorities that the products were being sold on to traders in Dubai and Switzerland so that they could fraudulently claim VAT repayments of around 20 per cent from HMRC.

HMRC became suspicious after paying out £10 million to the four men – money that was spent on luxury cars including a Bentley, Rolls-Royce,  Mercedes and a BMW, as well as luxury holidays in Dubai and Florida.

When claims were made for a further £18 million, HMRC began investigating ACM, asking for documents to prove it was entitled to VAT relief. This evidence could not be provided and court proceedings began.

Disqualified
HMRC’s “Operation Chert” found Ross Bell (42), Brian Murray (49), Lonnie Smith (52) and Garry Slater (43) – all based in Kent at the time of the fraud – were responsible. They were all sentenced at Kingston Crown Court on April 10 following conviction in February.

Bell (pictured bottom right) was a company director of ACM and received an eight-year sentence for cheating the public revenue, and five years for money laundering, to run concurrently. He was also disqualified from being a director for eight years.

Murray (pictured top left), also a director of ACM, was sentenced to seven and a half years for cheating the public revenue and a further four and a half years for money laundering, concurrently. He was also disqualified from acting as a director for eight years.

Smith (top right) acted as company secretary for ACM and was imprisoned for six and a half years for cheating the public revenue and a further five years concurrent for money laundering. He was also disqualified from being a director for eight years.

Slater (pictured bottom left), a graphic designer, worked as a trader for ACM. He was jailed for five and a half years for cheating the public revenue.

HMRC assistant director criminal investigations John Cooper said: “This fraud made huge profits for the gang members at the expense of UK taxpayers.

“The techniques used by HMRC officers in this long and complex investigation have resulted in the successful prosecution and imprisonment of those involved. We will now seek to recover the profits of the crime.”

The tax authority managed to stop £18 million of the claimed repayments and has initiated “confiscation proceedings” to reclaim the remainder.

*Not related to Amber Communications (UK) Ltd or Amber Communications FZ LLC

Q1 2013
The year kicked off with Ofcom considering new proposals to allow customers to exit their contracts mid-term without penalty – should prices rise.

O2 business director Ben Dowd warns dealers they must embrace unified communicatons (IT, fixed etc) or they won’t survive.  HTC CEO Peter Chou blames poor marketing for its continued financial slump – hitting a three year low. Meanwhile its “quietly brilliant” slogan is tipped to be axed. No such issues for Samsung, announcing sales of its Galaxy handsets have topped 100 million in three years. RIM (as it was) UK and Ireland MD Rob Orr labels 2013 as the most important year in the company’s history ahead of the much delayed BB10 launch. EE rebrands its T-Mobile and Orange estate and confirms it’s to close 78 stores. Operators begin bidding for 4G spectrum. Apple’s revenues top £34.4 billion for the final three months of 2012 – its highest ever – with reports labelling the firm richer than Greece. By contrast, Nokia worries continue, with 2012 losses totalling €2.3bn.

Sony doubles UK marketing spend to £40 million to help further boost its brand recognition post Ericsson split. Apple unveils the 128GB (it’s biggest ever) iPad with Retina display. BlackBerry BB10 finally unveiled, dropping the “confusing” RIM brand. Its first devices, the Z10 and Q10 unveiled and released following day. Analysts described BB10 as its “last roll of the dice”.  (FEBRUARY) EE CEO Olaf Swantee defends charging £5 more for 4G than 3G. Vodafone CEO Vittorio Colao dismisses 4G as for “technofreaks” – EE respond with Tweet (see pic). O2 ends deal with Phones 4U for subsidised handset connections. Ofcom confirms all UK network operators have been successful with their 4G spectrum bids which totalled £2.3bn – well below the £4 billion predicted. Dealers question EE’s loyalty to the channel after it reduces early upgrade period for Orange business customers from 90 to 30 days. MWC begins with Sony launch, the Xperia Tablet Z and vows to become Apple’s closest tablet rival. Huawei unveils the the world’s fastest handset, the Ascend P2, and aims to overtake Apple in smartphone shipments. Motorola says it can be a force in the UK market following its $12.5bn buyout by Google.

Elsewhere, O2 reveals it added almost one million contract customers in 2012. (MARCH) Samsung ordered to pay Apple $450 million – down from $1 billion over a design patent dispute. HTC UK and Ireland boss Phil Roberson leaves and is replaced by VP of product and operations Phillip Blair. Google wields the axe at Motorola cutting 1,200 jobs. BrightPoint is renamed Ingram Micro Mobility following $840m acquisition of Brightstar Europe. Samsung unveils the Galaxy S4. Micro-P launches into airtime. Three adds 900k new contract customers in 2012 to take its base to 9.1m. BlackBerry sells one million Z10s but loses three million users in the three months to March 2.

Q2 2013
HTC unveils the HTC First – dubbed the  “Facebook phone” – its profits dive £1.85m in Q1 – its lowest ever. Otterbox sets up a a dedicated fraud unit to tackle £2.3bn counterfeit mobile goods market. Micro-P promotes sales director Paul Bryan to MD as Gerry O’Keeffe becomes group managing director. EE to launch double speed 4G of 80Mbps in 10 cities by the summer. Tech Data Mobile European VP Stephen Nolan replaces UK and Ireland regional VP Jim Michel. Philip Sambrook quits Data Select for 20:20 Mobile as sales director. Vodafone announces it’s to join EE and O2 by introducing a revenue share model on July 1.  (MAY) O2 B2B teams undergo a reshuffle with 92 management staff put at risk.

Apple’s profits fall from $11.6bn to $9.5bn in its Q2 despite record revenue of $43.6bn. BlackBerry looks to appease “keyboard fans” releasing the  Q10 with Thorsten Heins predicting sales of “tens of millions”. Carphone Warehouse to acquire Best Buy’s European stake for £471m. Nokia shareholders tell CEO Stephen Elop the company is on a “road to hell,” fearing the manufacturer will fold.

Phones 4U CEO Mary Grant resigns. CCA Distribution wins £10m withheld VAT appeal against HMRC. Tech Data Mobile appoints Dylan Price as sales director. Galaxy S4 breaks 10m sales mark in its first month on sale. HTC First gets pulled from UK release amid US critisism and poor sales. Vodafone to spend £900m in the current financial year on upgrading its UK network. (JUNE)Liberty Global buys Virgin Media for $24bn.  Apple unveils redesigned iOS 7. Huawei opens its HQ in Reading as part of its £1.3bn investment into the UK economy over the next five years. Nokia Lumia 925 goes on sale as Samsung unveils the Galaxy S4 Zoom. Orr quits BlackBerry after 10 months to join Samsung as B2B EU telecoms VP. The EU proposes ending mobile roaming charges by mid-2014.

Vodafone delays the launch of its revenue share model to August 1. Carphone Warehouse Business begins trialling a new B2B franchise programme. Huawei unveils the Ascend P6, the “world’s thinnest smartphone”. Two leading lawyers issue a legal threat to HMRC after accusing it of making it near “impossible” for box breakers to trade in the UK. Vodafone buys Kabel Deutschland for £6.61bn. Sony launches the Xperia Z Ultra and SmartWatch 2. Carphone Warehouse COO Graham Stapleton replaces Andrew Harrison as its UK and Ireland CEO. Harrison becomes CEO of Carphone Warehouse Group while Roger Taylor becomes deputy chairman. Daisy Group acquires airtime distributor MoCo. Roaming charges  are cut 36 per cent by the EU.

Q3 2013
Nokia buys Siemens’ stake in Nokia Siemens Networks for €1.7bn. Brightstar’s proposed acquisition of 20:20 Mobile delayed after Spain’s biggest MVNO Yiogo, one of 20:20’s key customers in the country, is put up for sale. Six telecoms firms appear in court seeking damages of £415m over a 1999 Government ban on commercial GSM Gateway services. Sony begins a distribution partner review. O2 launches £10m 4G ad campaign, asking people to “Be more dog”. Nokia unveils the 41 megapixel Lumia 1020. EE to cut its 1,500 plus B2B dealer base by by two thirds. B2B dealer Sunrise Associates builds £250k B2B specific CRM called Atlas. OneCom named Vodafone ‘Platinum Partner of the Year’.

Apple posts record Q3 iPhone sales of 31.2m units, but yearly revenue falls £1.2bn to £4.5bn. O2 adds 292k contract customers in Q2 – a three year high. EE launches a three year plan to lead the market for B2B connections. Three’s UK operating profit for the first half of 2013 rises 231pc yearly to £86 million. (AUGUST) Former Vodafone UK enterprise director Peter Kelly joins Virgin Media Business as MD.  Sony Mobile drops Tech Data Mobile and appoints Micro-P as part of its distribution review 20:20. HTC pays a reported $12 million to Hollywood star Robert Downey Jnr to head up its new, more “playful” identity ads. BlackBerry board considers sale of the company.

O2 labels indirect partner channel “crucial” to the success of its 4G network. Met Police urges mobile operators to do more to prevent phone thefts. EE’s 4G network reaches 100 cities. O2 and Vodafone’s 4G network goes live on August 29. Vodafone sells 45pc stake in Verizon Wireless for £84bn. (SEPTEMBER) Microsoft announces a £4.6 billion deal to buy Nokia’s mobile phone business has been accepted. Samsung unveils Galaxy Gear smartwatch (pictured) and Galaxy Note 3. EE wins Asda Mobile MVNO contract from Vodafone. Vodafone relegates 11 top tier platinum partners. Apple iPhone 5s to5c hit the UK on September 20. Vodafone CEO Guy Laurence resigns to be replaced by enterprise director Joroen Hoencamp. Olive acquires Wish Comms. BlackBerry to cut 4,500 jobs by mid-2015. Fairfax Financial Holdings begins due diligence on a proposed $4.7bn purchase. EE director of indirect sales Nathan Vautier to leave the company at the end of the year.

Q4 2013
The LG G2 goes on sale. Three names 42 cities which will get 4G in 2014. HTC makes its first ever quarterly loss, with a deficit of £63m in Q3. Computer 2000 rebrands as Tech Data. Former Ingram Micro Mobility UK and Ireland VP James Bannister joins B2B dealer OneCom Services as sales director. MoCo is rebranded as Daisy. Tributes pour in following the passing of “larger than life” industry veteran Angus Dawe. Vodafone hits 100k 4G subscriber mark in first month since launching. EE beats O2 as the preferred provider of mobile services to BT. BlackBerry publishes an open letter to say it is “here to stay” amid fears it may disappear. EE to franchise 14 stores following the success of an initial eight. EE announces comms chief Steven Day to leave by the end of the year after six years. Accessories distributor Mobile Fun sets plans to have a presence in 50 countries by fiscal year up from 31.

SoftBank to pay $1.26bn for 57pc stake in Brightstar, increasing its ownership to 70pc over the next five years – delaying deal for 20:20 Mobile. EE adds almost half-a-million 4G customers in Q3 to take that base to 1.2m. Nokia unveils its first ever tablet device, the Lumia 2520 at Nokia World in Dubai. John Lewis gets a three month exclusive at launch (December 4). Apple reveals the iPad Air and upgraded iPad Mini. Micro-P rebrands as Exertis Micro-P. Daisy Group buys IT specialist Indecs for £18m. Apple sells 33.8m iPhones – a record for the September quarter – but profits fall yearly by 9pc to $7.5bn. Phones 4U appoints former EMI Music chief executive David Kassler as CEO. The High Court rejects a £413m damages claim from six dealers over a 1999 GSM Gateways ban.

Exertis Micro-P MD Gerry O’Keeffe says parent company DCC SerCom will extend its mobile distribution business into Europe. Fairfax decides not to buy BlackBerry. BlackBerry CEO Heins departs, replaced by Sybase CEO John Chen. CMO Frank Boulben and COO Kristian Tear also leave. Vodafone apologises to dealers over revenue share errors. Three exits Carphone Warehouse. Vodafone to invest £7bn in networks and services over the next two financial years. BlackBerry appoints VP for South Africa, Southern Africa and Turkey Alexandra Zagury as UK and Ireland MD. Motorola unveils the Moto G. Road safety charity Brake calls for a total ban on phone use by drivers. Ofcom to meet with operators to explain growing number of complaints. OneCom buys OneStream. Tech Data Mobile UK and Ireland sales director Dylan Price and marketing director Michelle Henchoz rumoured to be leaving. LG to double marketing spend in the UK as it looks to double its market share to 10 per cent by 2015. Brightstar reappoints Jim Michel as its UK and Ireland MD as the acquisition of 20:20 Mobile is completed. 20:20 UK MD James Browning to leave in January ahead of Brightstar 20:20 relaunch. Operators to cap stolen handset bills and end roaming charges. BlackBerry publishes another open letter to say: “Reports of our death are greatly exaggerated.”

HMRC has been refused permission to appeal against a tax tribunal decision, which saw mobile phone companies Unistar Group and Unistar Trading win back £2.4 million in withheld VAT payments.

The companies won their appeal against HMRC in January, after the judge at the Manchester first-tier tax tribunal found neither company knew “nor ought to have known” the transactions were part of a missing trader intra-community (MTIC) fraud.

HMRC then applied for permission to appeal the decision on March 14, but this application has now been rejected by the court.

HMRC said: “HMRC has largely driven this type of fraud out of the mobile phone sector, to the benefit of the legitimate trade, but we are naturally disappointed to be refused permission to appeal this specific case.

“We continue to successfully tackle other VAT fraud in the mobile phone sector through the courts, winning more than 100 tribunal decisions protecting over £300 million in the UK.”

HMRC could face legal action after two leading lawyers accused the tax collection agency of making it near “impossible” for box breakers to trade in the UK.

Their comments follow recent changes to HMRC’s rules on VAT repayments to international businesses buying batches of handsets in the UK. These state firms must present a single invoice for their purchases before any VAT can be returned.

Smith & Williamson partner Martin O’Neill and Dass Solicitors lawyer Robert Holland (pictured) said given that box breakers purchase handsets from many different stores, presenting a single invoice is not possible.

Retailers are also instructed to monitor customer buying patterns, with stores typically unable to sell more than two handsets to the same customer on any one day. This, Holland and O’Neill argue, is denying box breakers “legitimate” and “entirely legal” trade.

Holland said five registered companies have contacted him as a result of the rule changes and are considering a class action.

Holland said: “HMRC changed these rules with the deliberate intention of targeting box breakers, because they don’t like it. HMRC do not understand, or it refuses to understand, that phones can be bought and sold outside of distribution channels, which is perfectly legitimate.

“I think the intention of the notice is to eliminate box breaking completely. If this is the case, we want to challenge it in court.”

O’Neill added: “The box breaking market is entirely legal. Actions by either the payers of these subsidies or government agencies to inhibit this market are potentially an attack on legitimate trade and we encourage those involved to take legal advice at the earliest opportunity.”