Raj Gathani enters guilty plea as VAT case involving Unique Distribution and Future Communications nears conclusion
Raj Gathani, a former executive of Innovative Global Business Group (IGB) subsidiary Future Communications, has pleaded guilty at the Kingston upon Thames Crown Court to charges of “conspiracy to cheat the public revenue”.
The charges relate to VAT evasion over a number of years amounting to around 120 million. The case, code-named ‘Operation Inertia’ by HMRC is set to conclude next month, with sentencing expected in June.
Gathani appeared in court with co-defendants Haider Ravjani, Dilawar Ravjani, Tamraz Riaz and Maulik Bhatt. Another defendant Sadat Chishti was absent but represented by his
lawyer.
Gathani made his guilty plea in February. Around 17 defendants are expected in total.
The case follows several years of carousel fraud investigation by HMRC into IGB Group and its businesses. These included Unique Distribution, which ceased trading in 2008, and
Future Communications.
Accountanting firm Chantrey Vellacott was appointed by HMRC in 2008 to probe IGB’s activities dating back to 2005.
In 2007 IGB had tried to sue HMRC for a VAT refund of 38 million that had been withheld. HMRC later won a ‘Proceeds of Crime Act’ case against IGB. This resulted in all 27 UK businesses and assets owned by the IGB Group being frozen and placed in receivership in January 2008.
Around 100 staff at Unique attempting legal action in April 2008 to claim unpaid salaries. Requests to the court for staff compensation were denied until the trial concluded.
The Proceeds of Crime Act will allow staff to make a claim, as no redundancy settlements were made.
Reporting restrictions have been put in place by the court to prevent further details of the case being published.
The case is the latest success by HMRC. In March, five men were found guilty of importing handsets without VAT and reselling with VAT added. They were sentenced to a combined 37 years in prison for 140 million of carousel fraud. The gang earned between 26.5 million and 39.1 million each (see Mobile News, March 24).
