'Gang laundered millions through fake businesses'

A gang who set up a web of bogus companies were involved in a "colossal" £10 million money laundering scam, a court was told yesterday.

A jury heard that seven people were involved in moving massive amounts of euros to accounts in China, beyond the reach of UK authorities.

The operations involved transferring large amounts of money from company to company before exporting it through legitimate currency exchange companies.

But Andrew Peet, prosecuting, told Leicester Crown Court none of the gang had tax records which showed they had earned the sizeable amounts of money involved.

He said a police investigation called Operation Foam found the money came from criminal activities.

These included making bogus mortgage applications and forging one man's identity to cash a £250,000 savings bond.

Mr Peet said: "This is a colossal and sophisticated enterprise where a web of companies was used to keep one step ahead of the authorities which wanted to know where the money came from.

"They took criminal money and laundered it through buffer accounts.

"We can prove for definite that £500,000 came from criminal activity.

"We maintain the remaining £9.5 million was also the result of criminal activity."

Mr Peet told the jury that the principal figure in the operation, bankrupt businessman Mukhtiar Singh, had failed to attend court for the trial.

Singh (48) and his wife Gurdish Nijjar (38), both of Heybridge Road, Leicester; Kishan Srivastava (24), of Golden Hillock Road, Birmingham; Vikesh Dinesh Patel (38), of Denegate Avenue, Birstall; Nisha Uddin (28), of Shipton Road, Hamilton; Jasvinder Singh (50), of Folksworth Road, Peterborough; and Deepak Singh Rai (30) of The Littleway, North Evington, Leicester, all deny conspiracy to convert criminal property by making deposits of cash into bank accounts.

They all deny conspiracy to remove criminal property, involving credit balances, from England and Wales by transferring funds into foreign bank accounts.

They also deny conspiring to transfer criminal property – credit balances – between English bank accounts.

The offences are alleged to have taken place between January 1, 2009 and February 2011.

Additionally, Jasvinder Singh and Deepak Singh Rai each deny three similar charges of conspiring with Mukhtiar Singh between the same dates.

Mukhtiar Singh also denies a charge of acting as the director of Freeland Homes (UK) Limited between September 2009 and February 2011 while being an undischarged bankrupt.

He denies a similar charge involving a company called Black Elektroniks Limited.

Mr Peet said the two firms were examples of a number of companies, which never filed accounts, which were used to launder the money.

He said in six months in 2009 it transferred nearly £1.2 million to China through a legitimate currency exchange.

A clothing company fronted by Uddin, he said, transferred more than £2.1 million to China in a four-month period in the middle of 2009.

He said that Mukhtiar Singh was the central figure but all the defendants had taken part in the conspiracy, with Srivastava being in charge of administration.

Mr Peet told the jury they would have to sift through a great deal of bank accounts and other financial information that had been downloaded on to computer discs during the trial.

Judge Simon Hammond told the jury that they should not be prejudiced against Mukhtiar Singh because he failed to attend court.

He said he would be tried in his absence and the jury must reach verdicts on the evidence.

The trial continues.

It is expected to last up to six weeks.