A British man, Mohsin Usmangani Salya, has been sentenced to three years and three months in jail. Carbon Pulse reports that a court in Germany found Salya guilty of carbon credit VAT fraud.
In April 2016, the German police issued a call for information about three carbon credit fraud suspects. The men were wanted in Germany for money laundering and tax evasion. Two of the men, Ashraf Muhammad and Mobeen Iqbal, are from Pakistan. Mohsin Salya was the third.
The authorities suspect the two men of the following:
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 EUR 136,563,336 to the detriment of the Federal Republic of Germany.
The German Police stated that,
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.
In June 2016, Salya turned himself in to the authorities in Germany to face criminal proceedings.
In September 2016, a court in Frankfurt am Main set aside the international arrest warrant against Salya.
In November 2016, the German court convicted Salya of “serious tax evasion”, an official with the Frankfurt prosecutors’ office told Carbon Pulse.
REDD-Monitor wrote about the German Police’s call for information about Muhammad, Iqbal and Solya in April 2016. Three weeks later, I received an email from Aadiel Salya at the Salya Group. He wrote, “You have wrongfully written your blog”. He requested that I remove it.
An arrest at Heathrow
On 10 January 2017, police arrested Peter Singh Virdee, a British businessman. Virdee was arrested shortly after he arrived at Heathrow airport on a flight from Abu Dhabi.
He faces extradition to Germany and a possible 15-year sentence. Virdee is accused of fraud and €125 million in unpaid VAT on sales of carbon credits.
The Telegraph reported the arrest as follows:
Prosecutors in Germany allege Mr Virdee was one of the “central organisers” of a criminal enterprise to defraud the authorities of VAT on carbon credits under the EU Emissions Trading Scheme.
The 43-year-old businessman operated “in the background” and took pains to conceal his identity, prosecutors claim.
He was allegedly known to other members of the group behind the fraud only as “Batman”.
Virdee claims that his company B&S Property has more than £4 billion in assets. Virdee has met the Queen. He’s a visiting Professor at Manchester Metropolitan University. He’s a major donor to the Conservative party. He’s met Al Pacino. And he drives a Bugatti.
He also owns a Rolls Royce with the number plate 51 NGH.
“I knew from the beginning it was fraud”
The investigators in Germany had long been interested in Virdee, according to a recent article in the German magazine Der Spiegel. But they could only issue an arrest warrant after one of the other people accused spilled the beans.
The Spiegel reports a confession in a Frankfurt court at the end of last year. “I knew from the beginning it was fraud”, he said. “I had lost everything and had large debts.” The accused received a sentence of three years and three months.
At first business was slow, he said. But when “Batman” got involved, things picked up. One witness explained that in 2009 “Batman” used his contacts in Deutsche Bank to provide a direct contact to fraudulent emission traders in the bank’s London branch.
Virdee denies any wrong-doing. He put out a statement in response to the Spiegel article about his arrest:
Prof. Virdee categorically denies these allegations. He has never been involved in carbon trading let alone in any kind of fraud. While he is happy to co-operate with the authorities he intends to defend himself fully against these allegations and the attempts to extradite him to Germany.
Virdee’s statement adds that,
It appears that the only basis for the making of any allegations against Prof Virdee is from a statement given by a convicted fraudster, who entered into some form of plea bargain in return for implicating other people, including Prof Virdee, in the alleged fraud.
On 18 January 2017, Virdee appeared at Westminster Magistrates’ Court. An extradition hearing was set for 31 March 2017.