Gangmaster jailed for £2.5million tax scam

12:44pm Sunday 27th April 2008

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A Hounslow gangmaster has been jailed for six years for a fraud that netted him more than £750,000 over 10 years.

Southwark Crown Court heard Mazhar Hayat Raja, 50, from Hounslow Road, Feltham, had supplied hundreds of workers to companies around Heathrow and Gatwick.

But instead of handing over PAYE tax and national insurance collected from the workers' pay, the would collapse the companies in a "phoenixising" scam and pocket the money himself.

He was sentenced to 6 years jail on each of nine counts of cheating, a year on a count of false accounting relating to his business interests in 1996 and three years for the same charge relating to his business in 2001. All sentences are to run concurrently.

The court heard a team of dedicated HM Customs and Revenue investigators had discovered that Raja had since the early 1990s 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.

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 Raja, 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 three 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 £2.5million."

Revenue and Customs investigators are also applying to seize Raja's assets.