Hunting the fraudster who stole millions in VAT - Behind The Investigation | BBC News

Summary

BBC reporter Ben Robinson recounts his long-running investigation into Arif Patel, a Preston businessman once presented as a successful local tycoon. Patel’s textile company, Faisal Tex, became prominent, and in 2006 he appeared on the Sunday Times Rich List with an estimated fortune of £105 million.

Authorities suspected Patel’s business was involved in VAT carousel fraud: moving goods between companies and across borders to claim VAT refunds that were not owed. Investigators said textiles helped the operation attract less attention than the electronics often used in such schemes. One shipment of Swiss-made hats to Switzerland struck them as particularly suspicious.

The operation allegedly involved around 600 containers over roughly two years. Patel’s companies received £33.3 million in refunds, while further claims of about £60 million were stopped.

In 2008, nearly 300 officers raided locations across Preston, the North West and the Midlands. Patel was later charged with offences including conspiracy to cheat the tax authorities, money laundering, false accounting and selling counterfeit goods.

In 2011, Patel was allowed to travel to Dubai on bail after promising to return, but he did not. Efforts to extradite him were unsuccessful. Former HMRC investigator Graham Honey said Patel appeared to want a deal on his own terms rather than return to the UK. Honey recalled Patel saying, “I’m a tiger, not a caged tiger.”

Patel was tried in his absence and convicted in 2023. The court found that he had stolen more than £33 million and attempted to steal more than £90 million; a news report cited an attempted £97 million VAT scam. He was also involved in a large counterfeit-clothing operation, which prosecutors said may have generated as much as £200 million.

Patel was sentenced to 20 years in prison. The judge described him as “breathtakingly arrogant” and “totally dishonest.” Twenty-five members of the wider gang received sentences totalling almost 150 years, and £78 million of public money had been recovered.

Robinson’s more recent investigation traced websites, press releases and social media posts portraying a Dubai-based Arif Patel as a successful businessman and philanthropist. Some used stock photos or images of another person. One article denied the fraud allegations and quoted people presented as Patel’s supporters; their names matched those of a senior Lancashire police officer and a senior Crown Prosecution Service prosecutor who had been involved in the case.

Robinson said some websites appeared linked to a Dubai-based online reputation-management company, but he could not establish whether Patel was behind them.

A later press release included what Robinson identified as a genuine, recent photo of Patel. Using it, the team found images of him at glamorous events in Dubai, including a private venue, a boxing event, cricket and horse racing.

Anti-corruption champion Dame Margaret Hodge suggested the situation resembled “reputation laundering” and said she would ask about the status of an extradition order. Dubai’s government and Patel’s solicitor did not respond to the BBC’s questions.

Presenters and Contributors

• Melanie Stewart-Smith — presenter
• Ben Robinson — File on 4 Investigates journalist
• Graham Honey — former HMRC investigator
• Dame Margaret Hodge — anti-corruption champion