Leicester clothing makers ‘involved in money laundering, VAT fraud’

A BBC investigation has revealed that Leicester textile firms have been engaged in ‘money laundering and VAT fraud’. 

Some of the firms involved in the alleged illegal practices supplied to brands such as online fashion retailer boohoo and Select Fashion, BBC reported. 

The activity was first brought to light following a civil court case between the heads of two clothing wholesalers. 

Leicester-based company Rocco Fashion director Rostum Nagra was accused of stealing and moving all the assets of a firm that belonged to a business associate to his own company. 

Nagra was found to be involved in fraudulent activity related to producing “fake invoices” that included a 20% VAT charge and “shell companies”.

He was also found to be engaged in fulfilling orders from customers such as Select Fashion by arranging garments produced ‘cheaply by a so-called “cut, make and trim” (CMT) supplier’.

Such cash transactions were never booked in his company’s official accounts and records. 

Additionally, Leicester’s textile industry insiders reportedly revealed to BBC that cheap clothes demand has increased fraudulent activity in the city.