This is a consolidated appeal at the Supreme Court of the United Kingdom on 18th June, 2014.
In the first appeal, the appellants, Shakeel Ahmad and Syed Ahmed (āthe Ahmad defendantsā) were convicted by a jury for fraud and sentenced to seven years in prison. The Appellants were involved in the carousel fraud, which involved criminally misusing the collection system of Value Added Tax (āVATā) to extract money from the revenue authorities. The Ahmad defendants had been the sole directors and shareholders of a company known as MST, which dealt in computer central processing units (āCPUsā), which were zero rated for VAT purposes on import to the United Kingdom. The fraud involved five companies in Ireland, which, in a total of 32 transactions during April 2002, purported to export large quantities of CPUs to five companies in the UK, each of whom was either a registered company which went āmissingā or a genuine company the identity of which was hijacked by the fraudsters. The missing trader then ostensibly sold the goods to a company known as GW224, which then sold the goods on to MST.
In the second appeal, the three appellants, Michael Fields, Mitesh Sanghani and Karamjit Sagoo (āthe Fields defendantsā), and a fourth man, Wasim Rajput, were found guilty by a jury of conspiracy to defraud over a period between January and June 2005. The Fields defendants were each sentenced to five years in prison, and Mr Rajput was imprisoned for thirty months. The fraud was said by the prosecution to involve two other men who were acquitted, and one other man as to whose guilt the jury was unable to agree. The Fields defendants were described by the trial judge, as being āat the heart of the fraudā, and that it was āa joint operation between themā, whereas Mr Rajputās position was accepted by the judge as being more peripheral.
The fraudulent conspiracy involved the use of a company called Mercury Distributions Ltd (āMDLā), whose published accounts for the years 2002/3 and 2003/4 falsely recorded that it had over Ā£1m in fixed assets. It was appreciated that potential customers of MDL would be likely to check the accounts before committing themselves to doing business with it and granting credit. Premises were obtained by Mr Sagoo in February 2005, with the assistance of false trade references.
From then on, MDL engaged in fraudulent trading, applying to buy goods or obtain services on credit, which resulted in credit checks which indicated that it was financially healthy. As a result, credit agreements were approved, and goods and services were supplied by around 35 businesses, but no payments were ever made and, at least for the most part, the goods disappeared. The Fields defendants were each instrumental in this fraudulent activity. Mr Rajput was much less closely involved.
