Who is Arif Patel? How the Preston businessman ran an elaborate ‘carousel fraud’ and counterfeit clothing import scam

To some, Arif Patel appeared to be a law-abiding citizen, running a successful sock manufacturing business. He once owned premises on Fishergate in Preston city centre and enjoyed all the trapping of a successful businessman.

However, behind that facade, lurked a scheming and calculating criminal mastermind who was using his Preston-based company Faisaltex Ltd as the heart of his criminal enterprise importing counterfeit goods into the UK. Patel, who was found guilty in his absence at Chester Crown Court yesterday (April 11) of a £150m tax fraud, had long ago fled Preston and is believed to be living in Dubai.

His gang, the court heard, had tried to steal £97m through VAT repayment claims on false exports of textiles and mobile phones. Co-accused Mohamed Jaffar Ali, 58, of Dubai, was also found guilty of conspiracy to cheat the Revenue and money laundering yesterday. He stood in the dock for most of the trial but failed to attend court on 27 March 2023 and a warrant was issued for his arrest.

The convictions follow a 14-week trial at Chester Crown Court. Jaffar Ali also laundered the proceeds through bank accounts he set up in Dubai and offshore.

How did Arif Patel set up his £150m fraud?

Arif Patel and the Faisaltex group of companies had turned to bulk imports of counterfeit clothing in 2004. During the next three years dozens of containers with fake designer clothing inside were stopped at ports across the UK. Onward distribution to UK traders was confirmed when a delivery to a Glasgow wholesaler was intercepted by police and revealed to be poorly made designer rip-offs.

He also used the business, from 2004, to make fraudulent VAT repayment claims on supposed high-value goods and yarns. In total, the gang fraudulently claimed £97m on false exports of textiles and mobile phones, but HMRC stopped £64m of the claims.

What is a ‘carousel fraud’?

The scam is known as a carousel fraud, where goods are purportedly sold to genuine buyers, but in fact the whole process is controlled by the criminal, who instigates a paper trail of alleged sales and exports in order to reclaim VAT. Arif Patel frequently travelled to Dubai to meet Mohamed Jaffar Ali and also made trips to China and Turkey to set up deals with manufacturers of counterfeit clothing. The profits were laundered by Mohamed Jaffar Ali through freezone companies and bank accounts held in the UAE.

Money was sent to British Virgin Island-registered companies, which Arif Patel then used to buy property in his hometown of Preston, including commercial properties on Fishergate, the Lancashire city’s main shopping street.

What was Arif Patel charged with?

Patel, formerly of Sharoe Green Lane, Fulwoood, 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.

Arif Patel travelled to Dubai in July 2011 and failed to return. He was tried in his absence at Chester Crown Court where he was found guilty of all charges yesterday, 11 April 2023. He will be sentenced next month.