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NRI couple jailed in UK for VAT scam

Last Updated: Sunday, May 23, 2010 - 16:26

London: An Indian-origin couple who fled to India in 2001 after being arrested and questioned in a VAT scam worth nearly GBP 700,000 in 1998 and 1999, has been jailed after they returned to the UK recently.

Loughborough-based Rekha Parmar, 43, and her husband, Jiva Parmar, 43, have pleaded guilty for the fraud and have been banned from being company directors for 15 years.

While Rekha was jailed for three years and nine months, Jiva was jailed for three years and four months. The scam was described as "carousel fraud", which means a complicated type of cross-border tax evasion that exploits the fact that some countries such as Sweden do not levy Value Added Tax.

Consignments are reportedly sold and re-sold between companies located in different countries to benefit from this loophole, reports from Leicester said.

Rekha`s barrister, Sham Uddin, told the court that she came back to Britain from India because she missed the weather, `genuinely missed` the popular television serial, Coronation Street and wanted to join her family.

After profiting from the scam by nearly GBP 700,000, the couple upgraded their house, bought expensive cars and paid for expensive private schools for their children.

The Parmars` scam began in 1998, when each separately launched mobile phone wholesale companies.

Rekha was in sole charge of a company called AUM Communications, in Sweden, and Jiva of Sphinx Ltd, Loughborough.

Rekha`s company sold a consignment of Nokia phones to her husband`s company VAT-free.

In turn, Jiva sold the phones to a legitimate Manchester-based company, Cellstar, which was unaware of the dishonest plot, and was charged VAT by Sphinx, but the cash was not passed on to the tax department.

Cellstar then sold the phones to AUM Communications in Sweden, where VAT was not leviable.

The same or a similar consignment was again sold on to Sphinx, less VAT, and the cycle continued. In all nearly 13 such dishonest deals were carried out. The couple were arrested and questioned, but before being charged they fled to India in 2001.

They split up two years later and Rekha went to Dubai.

Judge Simon Hammond said: "These defendants were greedy and motivated to make a lot of money. It`s serious because it`s cheating honest taxpayers".

"It`s an aggravating feature fraudulent funds were used to finance their children`s private education".


First Published: Sunday, May 23, 2010 - 16:26
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