A British man arrested in Las Vegas in May 2014 was extradited to Germany last Friday from the US over his suspected role in tax evasion worth €136 million and linked to the EU carbon market, Frankfurt prosecutors said Tuesday.
The 57-year old man is “strongly suspected” of masterminding a VAT carousel fraud ring linked to the EU ETS through his Dubai-headquartered company between Aug. 2009 and May 2010, and of providing capital for the purchase of EU Allowances, the prosecutors said, adding that he was now in custody.
“The suspect fed certificates into the trading process via a company based in Dubai, and as the person factually responsible for four companies based in Frankfurt, Munich and Berlin he controlled the VAT carousel through members of (a) gang,” they added.
The Frankfurt prosecutors did not identify the man on Tuesday, but had previously announced the issuance of an international arrest warrant for 57-year old Mohammad Safdar Gohir of Huddersfield, West Yorkshire, for suspected tax evasion in the EU ETS.
US legal documents seen by Carbon Pulse showed that Germany had been seeking the extradition of Gohir after he was arrested by US authorities in Las Vegas in May 2014.
German prosecutors had said Gohir flew to Las Vegas to watch a boxing match, which featured British boxer and two-time former world champion Amir Khan.
A Las Vegas court earlier this year authorised Gohir’s extradition, with the judge ordering that Gohir be detained by US authorities until the businessman’s extradition received a final approval by the US Secretary of State.
An anonymous legal source close to the matter told Carbon Pulse that Gohir had since been flown to Germany.
The case forms part of a larger probe into carousel fraud, also known as missing trader fraud, in the EU ETS, which European authorities estimate to have cost governments more than €5 billion in lost revenues between 2009 and 2010.
The US court documents in Gohir’s extradition case added:
“Gohir controlled the central office in Dubai, which consisted of MP Solutions FZE and Vision Marketing & Management FZCO. It was in Dubai that Gohir controlled the entire VAT fraud chain, along with the other four companies … On April 28, 2010, searches, seizures and arrests took place in twelve countries across Europe, based on approximately 400 search warrants issued by the local court of Frankfurt am Main, and resulting in seven arrest warrants and numerous assets being seized. Five persons were detained in Germany and other parts of Europe. A review of the transaction data collected by the emission registries and the booking documents seized by tax investigation officers showed that all allowances traded by MP Solutions FZE were traded by German ‘missing traders’ to the companies Tageslicht Umweltssysteme GmbH, Energie Intelligenz GmbH, Roter Stern GmbH, and Vektor Energie GmbH, with the allowances later sold almost exclusively to DeutcheBank [sic], AG.”
German prosecutors last month charged seven current Deutsche Bank employees and one former member of the bank’s staff over their suspected involvement in helping the bank’s clients evade €136 million in taxes between Sep. 2009 and Feb. 2010.
The Frankfurt prosecutors office also on Tuesday said that a 35-year old Briton suspected of participating in the fraud between Aug. 2009 and Feb. 2010 had turned themselves in to German authorities upon arriving at Frankfurt airport on Sep. 15.
The individual, also not identified by prosecutors, is suspected of acting as managing director of a Munich-based carbon trading company that evaded €58 million in VAT.
German authorities in Apr. 2014 issued an international arrest warrant for Faisal Zahoor Ahmad from Halifax, West Yorkshire, who is now 35 years old, saying that as general manager of a Munich-based Roter Stern GmbH he evaded €58 million taxes through EUA trading.
Roter Stern was suspended from trading on the Munich-based Bayerische Boerse’s carbon platform in 2010 and was dissolved after insolvency proceedings the same year.
So far, more than a dozen people across Europe have been jailed for committing VAT fraud in the EU carbon market – a number that is expected to rise as more cases go to trial over the next year or two.
By Mike Szabo – firstname.lastname@example.org