Monday 12:35
A man from West London was jailed for a total of 58 years at Southwark Crown Court today after being convicted of a fraud which netted him in excess of £750,000 over a ten-year period.
He was sentenced to 6 years on each of a total of 9 counts of cheating, 1 year on a count of false accounting relating to his business interests at 5 April 1996 and 3 years on a count of false accounting relating to his business interests at 21 May 2001, all to run concurrently.
Mazhar Hayat Raja, 50, a respected Community leader of 27,000 people used a system of phoenixism in nine of his companies to illegally pocket money deducted from employees for tax and National Insurance. These companies were struck off and dissolved without ever having been notified to either HM Revenue & Customs (formerly the Inland Revenue) or Company's House.
Andrew Davies, HM Revenue & Customs (HMRC) Senior Criminal Investigator in the case said:
"This was an exceptionally complex case, the first of its kind in detecting this particular form of phoenixism. Tackling fraud is one of HMRC's top priorities. We have a duty to stop money being diverted and stolen from the nation in what are often large scale and ruthless attacks on the tax system. This case is a result of an in-depth investigation by dedicated officers who work tirelessly and diligently, fighting criminal attacks on the tax system. We are committed to bringing the criminals responsible for this form of crime to justice and recover the money stolen from the British taxpayer. We would encourage anyone with information relating to tax evasion or illegally imported goods to contact our confidential hotline number on 0800 59 5000 or email."
It was alleged in court that Raja had lied throughout the Revenue investigation and had then completed false statements of his personal assets. A team of dedicated Revenue investigators had discovered that Raja had, since the early 1990's, supplied labour to several agencies in the engineering and electronics industries that had been 'hidden' behind an empire of numerous companies that he secretly controlled. These companies had been formed mainly by Sivanandaraja but were never declared to the Revenue and were deliberately dissolved after Raja had enriched himself by effectively pocketing the PAYE tax and National Insurance deducted from his employees.
The court also heard how Raja had used three or four legitimate companies which supplied labour to businesses serving Heathrow and Gatwick airports. These businesses grew until he was supplying hundreds of people each week. Although he made PAYE returns for these companies, they were falsified to conceal the true amounts which should have been paid to the Revenue. He had also set up a number of bank accounts in the names of his wife and other relatives to conceal the hundreds of thousands of pounds that he had extracted from the companies.
In sentencing, His Honour Judge Rivlin QC said:
"This has been an extensive investigation which has enabled us to bring to justice this clever and immensely resourceful man.
The main purpose of your business was to cream off money for yourself and your family. You formed many Companies, almost all recruitment; some providing armies of workers, with only 3 of the Companies on record, the remainder all off-record and never revealed to HMRC - paying umpteen amounts of money to goodness knows how many workers. The most important result of your business was not just a house and profit, but a veritable fortune. You concealed the truth by telling endless lies to Inland Revenue investigators.
You involved others in the series of frauds by obtaining the identities of numerous workers which you used and abused. In the course of the Trial you have not hesitated to blame others and you dishonestly deprived the Revenue of at least £2.5 million."
The Judge also highly commended the Investigating Officer, Andrew Davies, stating it was clear that the investigation was largely the work of one man.
This case was successfully prosecuted by the Revenue & Customs Prosecution Office (RCPO). RCPO is an independent authority reporting directly to the Attorney General and is responsible for the prosecution of all HMRC cases.
Notes for editors
1. Mazhar Hayat Raja, DoB 09/02/1958, 279 Hounslow Road, Hanworth, Feltham, Middlesex TW13 5JE.
2. Raja was also disqualified from holding a Company Directorship for 12 years.
3. An application for confiscation of assets is being sought.
4. Phoenixism is a term used to describe a practice where a director/directors carry on the same business/trade successively through a series of companies, with each of the companies in turn becoming insolvent and leaving large tax and similar debts owing to government departments. The company carrying on the business at the time then transfers its business minus the debts to the next company. In this particular case, the companies had been struck off and dissolved without ever having notified any form of trade to either HMRC or Company's House.
5. RCPO was created by Royal Assent on 7 April 2005. An Independent prosecuting authority, RCPO reports directly to the Attorney General, and is responsible for prosecuting some of the largest drug and fraud cases in the UK.
Issued by HM Revenue & Customs Press Office
Website http://www.hmrc.gov.uk
Client ref Ref:LON 07/08
COI ref 160331P
