QUEEN'S BENCH DIVISION
London WC2A 2LL
B e f o r e :
MRS JUSTICE COX DBE
|MUBARAK ISMAIL PATEL|
|HABIBUR RAHMAN MAROOF|
|PUBLIC PROSECUTOR'S OFFICE OF NURNBERG-FURTH GERMANY||Defendant|
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Mr J Stansfeld (instructed by Stonewoods) appeared on behalf of the Claimant MAROOF
Mr B Cooper (instructed by Mohammed & Co) appeared on behalf of the Claimant DESAI
Ms H Hinton (instructed by the Crown Prosecution Service Extradition Unit) appeared on behalf of the Defendant
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"(c) particulars of the circumstances in which the person is alleged to have committed the offence, including the conduct alleged to constitute the offence, the time and place at which he is alleged to have committed the offence and any provision of the law of the category 1 territory under which the conduct is alleged to constitute an offence."
(1) The requested person is a member of a group which combined for the purpose of carrying out a "carousel" VAT fraud while trading or purporting to trade in electrical power. The object was to make fraudulent claims to input tax.
(2) The companies involved in the carousel in Germany were ASM Trading GmbH Capital Inc (headquarters in Berlin) ("ASM"), Energy Plus GmbH (headquarters in Nuremberg and Berlin) ("EP"), and ABM Online GmbH (headquarters in Munich) ("ABM").
(3) ASM was the "missing trader". ASM purported to issue invoices whose effect was to enable EP and ABM to make claims for input tax. The invoices were false because the underlying business was fictitious. There were purchases of electricity but they were sourced outside the EU. ASM did not submit monthly VAT returns as they were obliged and on which they would have been liable to pay VAT to the German tax authority. The warrant lists five invoices for the months of January to May 2011 inclusive purportedly issued by ASM to EP. The total sum invoiced was 19.4 million euros, of which the VAT component was 3.4 million euros.
(4) Using the fictitious invoices EP submitted false claims for input tax. As I have said, EP in fact made purchases of energy from other countries and sold on in particular to ABM. The electricity was resold by ABM into other countries VAT free, enabling ABM falsely to claim the input tax from the German tax authority.
(5) The loss to the German tax authority was 1.8 million euros.
"Mubarak Ismail Patel was a member of this organisation, which controlled the operation of this VAT carousel fraud from Great Britain. Here he associated at least with the persons with the aliases 'Pablo' and 'Roger' in order to evade VAT taxes on a Europe-wide scale by means of such carousels. Within the organisation, which is structured and managed as a concern, the accused has the alias "Professor" or "David". Within the organisation, the accused was responsible for the planning and execution of each single transaction, as well as for keeping the permanent contact with the members of the organisation in Germany."
"Maroof was a member of this organisation, which controlled the operation of this VAT carousel from Great Britain. Here he associated at least with the persons with the aliases 'Pablo', 'Roger' and 'Professor/David' in order to evade VAT taxes on a Europe-wide scale by means of such carousels. The accused Maroof was one of those responsible for the company Envirigo AB, with headquarters in Sweden, which was conductive towards the carousel transactions by supplying Energy Plus GmbH with electricity. Together with the members of the organisation in Germany, the accused Maroof also organised the numerous invoice chains of the carousel."
"Rizwan Desai was a member of this organisation, which controlled the operation of this VAT carousel from Great Britain. Here he associated at least with the persons with the aliases 'Pablo' and 'Professor/David', in order to evade VAT taxes on a Europe-wide scale by means of such carousels. Within the organisation, which is structured and managed as a concern, the accused has the alias 'Roger'. Within the organisation, the accused was responsible for the planning and execution of each single transaction, as well as for taking important decisions within the carousel in Germany."
"Incitement of aiding and abetting towards tax fraud in one particularly serious case in 8 cases and attempted tax fraud in one particularly serious case, each case in coincidence which membership in a criminal organisation.
In accordance with paragraphs 369, 370 Section 1 No. 1 and 2, Section 3 No. 1 and 5 General Fiscal Law, paragraphs 129 Section 1, 22, 23, 25, Section 2, 52, 53 Criminal Code."
(1) Charges 1 to 5 inclusive: At paragraph 20 of his judgment, the District Judge said: "20. Thus 5 discreet offences for each of the returns issued by ASM Trading GmbH as detailed in the table in box (e), which includes a date of return along with the amount claimed". This I consider to be a misreading by the judge of the words used in the warrant or a slip in the preparation of his judgment. The warrant states not that returns were submitted but that they were not. The source of the judge's finding is the statement in the warrant that ASM's invoices did not represent genuine trading and the following: "As was intended from the outset, ASM Trading GmbH did not fulfil its obligations to turn in monthly turnover tax advance returns in and the indicated VAT [ie in the invoices] was not paid to responsible Finanzamt Berlin fûr Körperschaften (Tax Revenue Office for Companies in Berlin) in the period for January to May 2011". It is clear, in my view, that the offence properly stated is ASM's fraudulent failure to submit VAT returns on which VAT would have been accountable for the period January to May 2011.
(2) Charge 6: EP's fraudulent claim for input tax dated 5 May 2011. The further source of the judge's finding is the statement in the warrant: "Energy Plus GmbH asserted a claim for the input/pretax from these invoices in the first quarter of 2011 (VAT return dated 05.05.2011) and had already included the invoices in its accounts in the second quarter in order to be able to claim the input/pretax".
(3) Charge 7: Late VAT return submitted by EP on 11 July 2011. The further source of the judge's finding is the statement in the warrant: "Contrary to duty, a VAT return was not turned in by Energy Plus GmbH for the second quarter [April, May and June] 2011 until 11.07.2011, [as a result] the approval of the tax revenue office for the turnover tax advance return in the first quarter of 2011 was not required".
(4) Charge 8: ABS's fraudulent claim for input tax dated 8 July 2011. The further source of the judge's finding is the statement in the warrant: "ABM Online GmbH also claimed for input/pretax from the invoices issued by Energy Plus GmbH in its VAT return dated 14.04.2011 for the first quarter of 2011 and dated 08.07,2011 for the second quarter of 2011, although those responsible were aware of the fact that the respective transactions were electricity trading purchases from Energy Plus GmbH intended to make business from the VAT carousel and that it is illegal to draw input/pretax from such invoices. The tax revenue office denied the approval of the turnover tax advance return of the first quarter 2011. No approval was required for ABM Online GmbH's advance return of the second quarter 2011".
(5) Charge 9: ABM's fraudulent attempt to claim input tax for the first quarter of 2011 dated 14 April 2011. The source of the judge's finding is the same extract from the warrant as that which supported charge 8.
"Although I accept that the warrant need not contain highly detailed information of the kind that one might expect to find in a civil pleading, it must contain enough information to enable the requested person to understand with a reasonable degree of certainty the substance of the allegations against him, namely, what he is said to have done, when and where and also, in a case where knowledge of particular matters is an essential ingredient of the offence, sufficient information to enable him to understand why it is said that he had the necessary knowledge."