A significant car leasing fraud has resulted in successful
recent prosecutions, and another pending trial. In November last
year, four men were convicted at Birmingham Crown Court of a fraud
worth some £500,000 involving cars and other goods.
Those convicted were Mitesh Shangani, Karamjit Singh Sagoo,
Wasim Rajput and Michael Fields. Three were each imprisoned for
five year terms, the other for two and a half years. A fifth
suspect is to be tried separately on related charges in
March.
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This was a case of a “long firm” fraud. A legitimate company,
with an established trading record and a good credit rating, was
acquired for fraudulent purposes after being offered for sale as a
going concern.
This company, Mercury Distribution Ltd, was in business as a
wholesale supplier of electrical goods. When the fraudsters
acquired it, the change of ownership and control details were not
notified to Companies House as the law requires.
After gaining control of the company, over a four month period
from February 2005 the fraudsters started obtaining cars on lease,
and other goods on trade credit terms. The fraud eventually came to
light after Dun & Bradstreet, on credit reference searches,
noted an apparent change in the company’s trading pattern.
Luxury cars
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By GlobalDataThe vehicles comprised six luxury sports cars together with a
Volvo saloon, all new and taken on two-year contract hire
agreements. Each of the cars was worth over £25,000.
The lessor was LeasePlan, through its Network Vehicles Ltd
franchise operation, where dealers act as lease brokers in small
fleet business. The brokerage, also an innocent victim of the
fraud, trades in the contract hire market as Vehicles for Business
(V4B).
Only one of the cars was recovered after the investigation. It
is likely that the others had been sold with purported title and
gone abroad. Some £300,000 worth of other fraudulently obtained
goods was, however, recovered by the police.
Detective Chief Inspector Simon Gray of the West Midlands Police
economic crime unit said: “This fraud was organised and
sophisticated, and the outcome demonstrates our ability to tackle
serious crime. Fraud is far from being a victimless crime. In this
case it threatened the survival of several supplier companies, and
.we believe that one such firm was saved as a result of the goods
we recovered.
“We will now use the full force of the Proceeds of Crime Act to
seek to identify and confiscate other assets gained from the fraud
and compensate the victims.”
