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Coventry man jailed in £38 million fraud

Government Communications (NDS)

11 April 2011

Harnaik Singh Sandhu, is the eighth member of an organised criminal gang to be sentenced, six others were jailed in February this year, and a seventh last year, to over 40 years.The multi-million pound attack on public funds in 2005, was uncovered by criminal investigators from HM Revenue & Customs (HMRC) who unravelled a complex conspiracy of deceit involving a chain of companies both here and abroad set up solely for the purpose of stealing money from the UK government.Confiscation proceedings are underway and properties worth in excess of £2.5 million have been restrained including a Spanish holiday home. Gary Lampon, Assistant Director of Criminal Investigation for HMRC, said: “This was a planned and ruthless attack to steal vast amounts of public money, which enabled this criminal gang to fund lavish and luxurious lifestyles. Their focus was to get rich quick and avoid detection by laundering the proceeds of their crime overseas. They enjoyed extravagant lifestyles, exclusive homes, performance cars and designer jewellery - ultimately at the expense of law abiding tax payers.” BackgroundThe gang set up highly complex chains of VAT registered companies, both here and abroad, to carry out the fraud. This included two companies, Sky Computers UK Ltd, based in Middlesex and Maxro Technology Ltd, based in Surrey, who were at the centre of the plot. The conspiracy involved the import of mobile phones and computer processing units (CPUs) predominantly from Dubai via Europe. Once in the UK, the goods would be sold on, but with VAT added, through a series of companies. Once the goods had been sold on a number of times they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods - although this was never paid in the first place.This money would then be siphoned off and laundered through overseas companies in Dubai and Spain and the gang would divide the dishonest profits of the fraud.Enquiries were launched when links were identified in an associated investigation, codenamed Operation Elemi. This saw seven men from the Midlands and one from Dubai jailed for nearly 34 years in 2008 and 2009. It involved money laundering offences exploiting the casino industry. This money included the profits from a number of activities including drug trafficking, multi-million pound VAT conspiracies in the mobile phone industry, counterfeiting and credit card fraud.