Company directors jailed for online scam

Company directors of a firm selling electrical goods have been jailed for a total of nearly seven and a half years following a fraud investigation by the North Yorkshire and York based National Trading Standards eCrime team.

Digital tablet

The scam was uncovered after customers complained that goods ordered online from the company’s Electrohut website were never delivered or that goods received were different to the order. Over the period of a few months the site had taken £330,000 in orders from almost 1000 consumers.

Saleem Arif, aged 54, Westfield Road, Edgbaston, Birmingham, was sentenced to four years six months at Leeds Crown Court for money laundering and fraudulent trading*. Kewal Banga, aged 39, Waddell Grove Land, Stourbridge, was sentenced to two years 11 months for pleading guilty to money laundering*.  Arif and Banga were each disqualified from being company directors for eight years. A third defendant was previously found not guilty of both counts.

Arif, a director of Electroponents, ran and advertised a website, www.electrohut.com, offering low cost deals on branded TVs, cameras, tablets, smartphones and computer hardware.

When consumers complained and asked for their money back because goods they had ordered never arrived or were the wrong item, they were fobbed off with excuses by company representatives.

Some consumers were told the website’s merchant services provider could no longer service the volume of business or were told to ask the merchant provider for a refund. Other consumers were told the company’s phone lines were temporarily unavailable and would be fixed shortly. The defendants also used misleading addresses in London and, in March 2015, they changed the company’s name to Discount Gizmos.

In sentencing the pair, Judge Thomas Bayliss QC, said: “Both of you were responsible for laundering the proceeds and denying creditors access to their money. You both took leading roles. It was a sophisticated fraud over a five month period generating 852 charge backs.”

Lord Toby Harris, Chair of the National Trading Standards, said: “The National Trading Standards eCrime Team launched a successful investigation into Arif and Banga. It’s a reminder that we do take action against criminals and I hope the sentences deter others from engaging in this type of activity.”

Mike Andrews, lead co-ordinator for the National Trading Standards eCrime Team, said: “In many cases Arif had no intention of supplying goods to consumers who paid in good faith. On the few occasions he did supply items, they were often not what the customer had ordered in the first place.”

Councillor Andrew Lee from North Yorkshire County Council said: “We should all be careful when shopping online and take more care when buying electrical goods, but cases like this show that our eCrimes team will not hesitate to take action and that these scams do not always go the criminals’ way.”

This story was published 16 May 2019