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Fraudsters jailed for £1m property fraud

A pair of fraudsters who bought and sold over 50 properties but failed to pay nearly £1 million in tax have been jailed for more than eight years.

Fraudsters jailed for £1m property fraud
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  • Maja Garaca Djurdjevic
  • January 21, 2020
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Madhu Bhajanehatti of London and Himat Chana of Ilford, Essex, sold dozens of properties over an eight-year period, and evaded £991,000 in capital gains tax, a HM Revenue and Customs (HMRC) investigation revealed.

Although the men disclosed some income on their self-assessment tax returns, HMRC has said that they deliberately hid the sales of properties across London and Essex. 

Richard Wilkinson, assistant director, fraud investigation service, HMRC, said, “The duo believed they were above the law and showed a blatant disregard to their obligations by failing to declare substantial income from property sales.

“It is simply unacceptable to steal from UK taxpayers. HMRC continues to pursue those who attempt to hide their income and ensure everyone pays what they owe when they owe it. I urge anyone with information about any type of tax fraud to report it online or contact the HMRC fraud hotline on 0800 788 887.” 

HMRC officers discovered the men had built up their property portfolios by using the proceeds of previous sales, which was subsequently uncovered by a property taskforce set up to tackle fraud in the industry.

Bhajanehatti, who admitted the fraud, evaded £650,000 in tax and Chana evaded £341,000. As a result, Bhajanehatti was sentenced to 50 months in jail, while Chana received 52 months. 

Bhajanehatti was also ordered to pay back £190,086.42 in a confiscation order. He has less than three months to do so or he faces a further two years and six months in jail.

Confiscation proceedings for Chana are ongoing. If further assets are identified in the future for Bhajanehatti, they could also be confiscated, HMRC has confirmed.

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