The ringleader of one of the UK’s biggest carousel tax frauds that involved mobile phones must hand back more than £90 million, following a court ruling.
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
