Executive Summary
Between 2004 and 2007, UK clothing manufacturer Arif Patel orchestrated a carousel-style VAT fraud through his business, Faisaltex, and a network of sham entities. The scheme extracted £33.4m from the UK government via false VAT repayment claims tied to phantom textile exports. Simultaneously, the network imported and sold counterfeit luxury clothing valued at £19.19m+.
The proceeds were laundered through offshore banking arrangements and used to build a property and luxury asset portfolio across the UK and MENA jurisdictions, including the UAE and Morocco.
In 2023, Patel was convicted in absentia, and in August 2025, Chester Crown Court issued a £90.5m confiscation order, marking one of the largest UK proceeds-of-crime recoveries tied to trade fraud and counterfeit apparel.
For AML and compliance teams, this case underscores a critical lesson: Trade Based Money Laundering (TBML) doesn’t always involve drug cash, it can look like routine textile invoices and VAT claims until the numbers fail to align with commercial reality.
