Counterfeit clothing boss sentenced for fraud worth more than £150 million

Two men involved in one of the UK’s largest ever carousel tax frauds have been sentenced to a combined total of 31 years in jail.

Sock manufacturer Arif Patel, 55, of Dubai, was sentenced in his absence to 20 years behind bars, while co-accused Mohamed Jaffar Ali, 59, also of Dubai, was also sentenced in his absence to 11 years in jail.

A joint HM Revenue and Customs (HMRC) and Lancashire Police investigation found Arif Patel, formerly of Preston, and his criminal gang tried to steal £97 million through VAT repayment claims on false exports of textiles and mobile phones.

They also imported and sold counterfeit clothes that would have been worth at least £50 million, had they been genuine. The proceeds were used to buy property across Preston and London through offshore bank accounts.

In total, 26 members of this criminal empire have now been convicted and sentenced following six trials between 2011 and 2023, leading to jail terms totalling 147 years and seven months.

More than £78 million of the gang’s assets have been restrained and the process to recover these proceeds of crime is in progress.

Eamonn O’Neill, Assistant Director, Fraud Investigation Service, HMRC, said:

“Arif Patel and Mohamed Jaffar Ali were at the heart of one of the biggest carousel tax frauds this country has ever seen and the severity of their crimes has been recognised by today’s sentencing.

“We will continue to pursue those criminals who blatantly steal from the public services we all rely on and look to recover the proceeds of their crimes from current and future wealth.

“We are determined to ensure absconders face justice and we have helped secure the return of more than 70 fugitives since 2016, including some of the UK’s most harmful tax cheats.

“We encourage anyone with information about tax fugitives or suspected tax fraud should report it to us online. Search ‘Report Fraud HMRC’ on GOV.UK and complete our online form.”

Andrew Fox, Senior Prosecutor, CPS, added:

“The sentencings of Arif Patel and Mohamed Jaffar Ali successfully conclude this part of an immense investigative and prosecution case against an organised criminal group, involved in counterfeit clothing, fraudulent VAT claims and money laundering.

“The cost to the public purse was tens of millions, money that could have been used for essential public services in the NHS, social care and education.

“Patel was sentenced in his absence, having remained in Dubai throughout the trial.

“The CPS will now pursue confiscation proceedings against the defendants, to prevent them enjoying the benefits of their criminal enterprise.”

Sam Mackenzie, Assistant Chief Constable, Lancashire Constabulary, said:

“While presenting himself as a genuine and reputable businessman Arif Patel in fact used stolen taxpayers’ cash to line his own pockets and fund a lavish lifestyle. This is money that should have been used to fund the vital public services which we all rely on and to which most of us contribute our fair share by working hard and paying tax.

“I welcome these sentences which are the culmination of a lengthy and complex investigation which has involved many years of hard work and dedication by police officers and staff and partners from HMRC who have worked together in a truly joint operation.”

At the sentencing, HHJ Everett said Patel led a “breathtakingly arrogant and dishonest organisation”.

Following a 14-week trial at Chester Crown Court, Arif Patel was found guilty of false accounting, conspiracy to cheat the public revenue, the onward sale of counterfeit clothing and money laundering.

Mohamed Jaffar Ali was also found guilty of conspiracy to cheat the Revenue and money laundering.

Notes to Editors

1. Arif Umarji Patel, DOB 06/10/1967, formerly of Sharoe Green Lane, Fulworth, Preston, who now lives in Dubai, was charged with:
   • Conspiracy to Cheat the Public Revenue, between 1 June 2004 and 28 February 2006.
   • Conspiracy to Cheat the Public Revenue, between 1 June 2004 and 28 February 2006.
   • Conspiracy to launder money, between 1 January 2004 and 4 April 2008.
   • False Accounting, between 24 March 2003 and 4 April 2008.
   • Conspiracy to sell, offer for sale or distribute goods which bear a sign identical to or likely to be mistaken for a registered trademark, between 1 January 2004 and 3 May 2007.
2. He was found guilty of all counts by a jury at Chester Crown Court on 11 April 2023. He was sentenced to 20 years in prison today (25 May 2023). He was also disqualified as a director for 10 years.
3. Mohamed Jaffar Ali, DOB 01/05/1964, of Al Muteena Street, Dubai, United Arab Emirates, was found guilty of two counts of Conspiracy to Cheat the Public Revenue, between 1 June 2004 and 28 February 2006 and Conspiracy to launder money, between 1 January 2004 and 4 April 2008 by a jury at Chester Crown Court on 11 April 2023. He was sentenced to 11 years in jail today (25 May 2023), reduced by 528 days for time spent in custody and on court tag. He was also disqualified as a director for eight years.
4. Twenty-four other people were convicted during five trials between 2011 and 2014 with a total of 116 years seven months imprisonment handed down, a total of 135 years in directors’ disqualifications, and three Serious Crime Prevention Orders issued.
5. More information about the convictions of Arif Patel and Mohamed Jaffar Ali can be found in our press release issued last month here.
6. Follow HMRC’s press office on Twitter @HMRCpressoffice.