Last week Carbon Pulse reported that the Public Prosecutor‘s Office in Frankfurt am Main and the German Federal Criminal Police have issued a “wanted poster” for three men suspected of being involved money laundering and tax evasion relating to the EU Emissions Trading System.
Two of the men, Ashraf Muhammad and Mobeen Iqbal, are from Pakistan. The third, Mohsin Usmangani Salya, is British. The three men are suspected of being involved in the missing trader or carousel fraud, that is estimated to have cost European governments at least €5 billion in lost VAT revenues.
UPDATE – 31 January 2017: In November 2016, Mohsin Salya was sentenced to three years and three months in jail for tax evasion:
The fraud involves a company importing carbon credits free of value-added tax (VAT) from one EU member state to another. The company then sells the carbon credits with VAT included in the price. A series of companies and countries is often involved. The fraudulent company pockets the VAT and disappears.
Between August 2009 and April 2010, he acted as a person behind the scenes and leading member of a gang committing a so-called VAT chain fraud scheme on the basis of CO2 emission allowances for greenhouse gases and thus caused a loss amounting to 136 Million Euro to the detriment of the Federal Republic of Germany.
An international arrest warrant was issued for Muhammad and Iqbal in July 2014. The BKA suspects they may be in Dubai.
The BKA website has the following to say about Mohsin Salya:
SALYA is suspected of causing damage in excess of EUR 125.6 million to the detriment of the Federal Republic of Germany between September 2009 and April 2010. He has numerous contacts abroad, in particular in the United Kingdom, the United Arab Emirates (Dubai) and Pakistan, and he is a central figure acting in the background of this VAT missing trader fraud scheme.
An international arrest warrant has also been issued for Salya.
Salya, who also calls himself Joe Mutmalla or Joe Muttumthala, played a leading role in Lösungen 360 GmbH, a firm registered in Frankfurt in 2009. In 2012, the Spiegel reported that within a few weeks, Lösungen 360 GmbH became one of Deutsche Bank’s top trading partners in carbon credits.
In three days in August 2009, the Bank transferred more than €13 million to Lösungen 360’s bank account. Shortly afterward, the account was emptied, leaving nothing to pay the VAT. Nevertheless, Deutsche Bank claimed around €2.5 million VAT refund on the carbon credits from the Finance Office.
In another case, Deutsche Bank received 30,000 carbon credits from Shafiq Handelsgesellschaft, a company whose only known activity was running a snack bar in Hiedelberg. Deutsche Bank decided that looked too suspicious and returned the carbon credits. But when the same carbon credits arrived a little later via Lösungen 360, the Bank accepted them.
The Spiegel reported that the investigators found it “inconceivable” that Deutsche Bank could make payments of millions without investgating the companies receiving the money.
It doesn’t make it any better that Lösungen 360’s office was less than 500 metres from Deutsche Bank’s head office in Frankfurt.
Here’s an archived copy of Lösungen 360’s website – the company logo is very appropriate for a company carrying out carousel fraud:
The manager of Lösungen 360 was Irfan Patel. In December 2011, Patel was sentenced by the Frankfurt Regional Court to seven years and 10 months in prison for his role in Lösungen 360’s “gang-based tax evasion”.
Here’s the German police poster:
The German authorities are asking anyone with any information about these three to contact the German police:
Phone: + 49 (0)611 55 -13101
Fax + 49 (0)611 55-12141