Carousel tax fraudster loses £90m property empire

The mastermind of one of the UK’s biggest ever carousel tax frauds has been ordered to pay back more than £90m with the sale of property across Preston, London and overseas.

Sock manufacturer Arif Patel, 57, from Fulwood, was the head of an Organised Crime Group based in the city.

He and his criminal gang tried to steal £97m through VAT repayment claims on false exports of textiles and mobile phones.

They also imported and sold counterfeit clothes that would have been worth at least £50m, had they been genuine.

The proceeds of the crimes funded a property empire, including commercial and residential premises in Preston and London, bought through offshore bank accounts and companies. He also owned property in Morocco, the United Arab Emirates, Saudi Arabia and Turkey.

Now a judge at Chester Crown Court has ruled that more than £90m of his restrained property assets should be sold – with the money returned to fund UK public services. His Ferrari 575 Superamerica has also been restrained and will be sold at auction.

Arif Patel, who is on the run in Dubai, and his co-accused Mohamed Jaffar Ali, 61, of Dubai, were found guilty in their absence of fraud and money laundering offences following a 14-week trial in 2023.

The convictions followed a joint investigation between HM Revenue and Customs (HMRC) and Lancashire Police, which also secured jail sentences totalling more than 116 years for 24 other gang members.

Richard Las, director of HMRC’s Fraud Investigation Service, said: “Arif Patel lived a lavish lifestyle at the expense of the law-abiding majority, but he will now lose the property empire he amassed from the proceeds of crime.

“Our work never stops at conviction. For the last two years we’ve worked with police and CPS partners to secure one of the biggest criminal confiscations we’ve ever recovered.

“Tens of millions of pounds of stolen money will now go back to directly fund public services.”    

Mark Winstanley, Lancashire’s Assistant Chief Constable, said: “Arif Patel was the head of a Preston-based Organised Crime Group responsible for causing millions of pounds worth of losses to multiple companies.

“His actions, motivated by greed directly impacted on the taxpayer. A multi-agency operation involving Lancashire police and HMRC has worked tirelessly to bring confiscation proceedings to this point.

“The Confiscation Order granted for £90m will ensure funds are returned to the public purse thereby recovering his criminal gains.

“Mohammed Jaffar Ali was Arif Patel’s trusted financial enabler in Dubai and he too has been made subject to a Confiscation Order for £677,000.

“Lancashire Police are committed to ensuring that crime doesn’t pay and will pursue every avenue to recover monies and assets from those that seek to exploit others for their own gain.”

Arif Patel’s Preston-based company, Faisaltex, was the heart of his criminal empire. From here, he ran the counterfeit clothing import operation and false export business.

As well as being a major player in the overall criminal conspiracy, Mohamed Jaffar Ali also laundered the proceeds through offshore bank accounts.

Arif Patel travelled to Dubai in July 2011 and failed to return. He was tried in his absence at Chester Crown Court where he was found guilty of all charges in April 2023.

Mohamed Jaffar Ali was found guilty of conspiracy to cheat the public revenue and money laundering. They were sentenced in absence to a total of 31 years in prison.

A total of 24 other people were convicted during five trials between 2011 and 2014 with a total of 116 years seven months imprisonment handed down, a total of 135 years in directors’ disqualifications and three Serious Crime Prevention Orders issued.

Carousel fraud is a complex scam where criminals create chains of fake business transactions to steal VAT repayments. Goods are moved between different companies in a circular pattern, creating false export and import records that criminals use to try and claim large sums back from tax authorities.