MTIC Fraud: VAT Fraudster Ordered to Pay £14 million
September 09 2013
Nasir Khan, who was convicted in 2011 for his role in a Value Added Tax (VAT) fraud, has now been ordered by the Crown Court to pay back £14 million within nine months or face extended jail time. Mr Khan was once shortlisted for the Bank of England’s Young Entrepreneur of the Year award. Mr Khan was also married to the Footballers’ Wives actress Laila Rouass.
Missing Trader Intra Community VAT Fraud
Nasir Khan was the owner of The Accessory People PLC, an apparently successful business dealing in mobile phone accessories. Around 2001, The Accessory People PLC began fraudulent wholesale trade in mobile phones across the EU boosting turnover from £13 million in 2002 to £219 million in 2003.
HMRC have stated that Nasir Khan and his criminal gang were involved in one of the UK’s largest VAT “missing trader” fraud over a period of two years between June 2001 and July 2003. VAT fraud is also known as the missing trader intra community (“MITC”) or carousel fraud, whereby fraudulent businesses interpose themselves in a supply chain trading in high value low bulk goods within the EU in order to obtain, and disappear with, large amounts of VAT on the transactions.
The main trade products targeted are usually grey market mobile phones and computer chips, which are either old model stock, or excessive production sold into the grey market by the manufacturers. Such products have a small volume and high value. MTIC fraudsters have recently moved onto other products such as console games, hotel toiletries, alcoholic and Red Bull drinks. MITC fraud exploits the single market rules that were introduced within the EU in 1992.
The fraudster must obtain a VAT registration number to enable him to purchase goods VAT free from another EU member state then sell these goods in the UK to other VAT registered businesses, at VAT inclusive prices. These businesses pay the VAT to the fraudster who goes missing without accounting to HMRC for outstanding VAT.
On sentencing Nasir Khan in 2011, His Honour Judge Loraine-Smith stated the following:
“The levels of profits were too great for you to resist. You had tried to paint yourself as a generous provider to charities and as a role model – in truth, you were nothing of the kind. You were close to the heart of the fraud and benefited greatly from it.”
VAT Fraud: Capture and Seizure of Goods
HMRC’s lengthy investigation into Nasir Khan and his criminal organisation led to a series of coordinated arrests across the UK and resulted in the seizure of over half a million documents by tax authorities across various jurisdictions. HMRC were successful in obtaining offshore bank accounts which identified how money has been transferred from UK and EU into bank accounts in Hong Kong, Pakistan and Dubai.
Robert Alder, Assistant Director of Criminal Investigation for HMRC, said:
“Nasir Khan enjoyed the lifestyle of an international playboy, investing the proceeds of his crimes in a portfolio of luxury rental apartments in London, Marbella and Gibraltar. He kept a yacht and a fleet of luxury cars, including a Bentley, Ferrari, Lamborghini, Porsche and over a dozen Mercedes with personalised number plates. They have all been retained”.
HMRC are now targeting alcohol and cash-and-carry businesses that are suspected of engaging in MTIC fraud or carousel fraud. These businesses often have high revenue, low profit margin and fast turnover of stock which make MITC fraud attractive to fraudsters.
The articles published on this website, current at the date of posting, are for reference purposes only and do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.
Call us on ☎ 02071830529 or email us on for more information about the legal services we provide. Our team of London lawyers are based in Middle Temple adjacent to the Royal Courts of Justice. We are committed to providing professional and specialist legal advice.