A Rochdale businessman, who pocketed nearly £1.25 million in two VAT repayment frauds, has been jailed for five years.
Mubbashir Alam, 39, of Maldon Street in Greater Manchester, set up eight fake clothing companies in a deliberate attempt to claim false VAT repayments. Gemma Caffrey, 33, and Shabana Asim, 45, both also from Rochdale, helped Alam commit the fraud and fronted two of the fake businesses each.
The group hijacked other people’s identities to conceal the ownership of many of the companies in an attempt to disguise their own involvement.
When HMRC tax inspectors visited Alam’s premises in Rochdale, he tried to avoid arrest by persuading others to pretend to be the owners.
The fake companies were described as manufacturing children’s clothing, dealing in large quantities of cloth and yarn and selling sewing machines.
Between 2007 and 2010 the six fake companies were: Symran Concept Ltd, Protec Industries Ltd, Bond Trading, Maple Developments Uk Ltd, Fuzion Textiles and Future Fashions.
The two fake companies Alam and Asim used for fraud were S1 Marketing Ltd and Tristian Industries Ltd. They created false invoices to reclaim £140,000 VAT on materials for the fictitious manufacture and sale of clothing.
Alam and Caffrey pleaded guilty to all charges in July 2014, Alam was sentenced to five years jail and Caffrey to six months imprisonment at Manchester Crown Court on Tuesday 18 November. Asim pleaded guilty and will be sentenced in December.
His Honour Judge Rudland said that Alam “carefully planned a diligent and sustained fraud on the public revenue” and Caffrey, “whilst not a part of the planning process was an essential cog in the machinery”. HHH Rudland reserved comment on Asim until her sentencing date.
Sandra Smith, Assistant Director, Criminal Investigation, HMRC, said: “Alam went to great lengths over several years to distance himself from the fake companies he set up to commit the fraud. He stole a substantial sum of public money to line his own pockets.
“HMRC will pursue every avenue to ensure that the UK VAT system is not abused in this way. These criminals now face proceeds of crime confiscation proceedings to ensure that the money they stole is restored to the taxpayer.”