Glasgow Man Jailed for Carousel Fraud

A Glasgow man has been jailed for three years for using his cash and carry business to launder over £846,000. Pretending that the money had come from a customer buying large amounts of cigarettes he was actually using stolen identities of innocent or fictitious individuals and companies.
 
Athif Sarwar of Mearnskirk, Glasgow used the United Wholesale business – of which he was director – to launder the criminal profits from Missing Trader Intra Community (MTIC) or carousel fraud involving the purchase and sale of mobile phones. He was found guilty at Glasgow High Court of "concealing, disguising and transferring criminal property".

Speaking after the sentencing, Anne-Marie Gordon, Assistant Director of Investigation for HMRC in Scotland, said "Today’s sentence sends out an important warning to anyone who thinks they can cash in by laundering the profits of crime without having to face the consequences. "

Sarwar’s road to court began in April 2003 when HMRC visited his cash and carry. The officers were looking into payments of around £210,000 made to United Wholesale by a Glasgow based company which dealt in computer components. Sarwar claimed that this money had come from a ‘Mr Ahmed’, a customer who bought substantial numbers of cigarettes, placing orders by phone and sending a representative to collect the goods.

When the officers returned later that week Sarwar attempted to explain a suspicious financial transaction involving another large amount of money, this time transferred out from United Wholesale into a different account. Sarwar claimed that there had been an incident at the cash and carry involving a representative of the mysterious Mr Ahmed. As before a man had arrived at the premises to buy cigarettes on account, but when this was refused he became aggressive and insisted that his employer’s funds be transferred into another account. As a result, £280,439.59 was transferred out of the United Wholesale account to another company which, it later transpired, was involved in the purchase and sale of mobile phones.

HMRC investigators were suspicious of Sarwar’s story. Financial records for the cash and carry showed that a number of companies – all involved in the purchase of computer components and suspected of missing trader fraud – had transferred a total of £846,137.75 into United Wholesale’s account between February and April 2003. Daily cash sheet records and till rolls provided no evidence of large-scale purchases; in fact on average, the largest transaction on any day would rarely exceeded £2,000.

During subsequent enquiries, to identify a link to criminality, Investigators visited the seven companies making payments to United Wholesale. These companies were all involved in the purchase of mobile phones or computer chips, mainly from missing traders. All of the goods involved in the MTIC fraud were eventually traced back to either missing or hijacked traders (traders that had their company identity stolen).

The majority of the funds received by United related back to third party payment instructions made by to 2 traders – Risebrook Resources Limited and Goldhaven Technologies Limited, both of which are missing traders. The listed directors of these companies all reside in the Glasgow area. Investigations have determined that the directors are either completely fictitious or use identities stolen from innocent people – one of the named directors used the identity of a man who died six months before the company started.

Judge Lord Carloway said on sentencing "It is clear that the type of fraud involved is one which is prevalent throughout the United Kingdom, does considerable damage to Treasury finances and the Court must do what it reasonably can to discourage those involved in such frauds… only a custodial sentence can be considered appropriate."