Nine years for VAT fraud and money laundering

A Dundee man has been sentenced to nine years imprisonment, after being convicted of three charges of being knowingly involved in the fraudulent evasion of VAT and two charges of money laundering, occurring between 2002 and 2004.

Shahid Ramzan was found guilty of profiting to a total of £20.5 million from the VAT fraud, which he then laundered by transferring it to numerous accounts.

According to HMRC, Ramzan had set up a number of companies in Scotland and Spain to trade in mobile phones across Europe. However, the majority of the trading was fraudulent and the Spanish companies were in reality being run from addresses in Dundee.

From January 2003 to July 2004 Ramzan traded millions of mobile phones, which led to some companies in the trading chain going out of business and left millions in unpaid VAT debts.

This type of fraud is known as a "Missing Trader Intra-Community" fraud, or MTIC fraud.

In very general terms MTIC fraud is the theft of VAT from a government by organised crime groups who exploit the way VAT is treated within the member states of the EU.