Categorized | UK

Birmingham MP gave £50 million fraud gang a House of Commons reference



Jun 19 2011

by Jeanette Oldham,

Sunday Mercury

Khalid Mahmood

Khalid Mahmood

A MIDLAND MP provided a criminal gang with a House of Commons reference which was used to apply for a £10 million fraudulent mortgage.

Khalid Mahmood, who represents Birmingham Perry Barr, last night admitted he supplied petty thief Mozam Aziz with a reference on House of Commons headed notepaper.

The MP, who had a curry with the fraudsters in Birmingham at the height of their spree, told the Sunday Mercury: “I had no idea what they were doing.

“It was an error of judgment. But I was misled.”

Mr Mahmood confirmed he was quizzed by detectives from West Midlands Police Economic Crime Unit and the Serious Fraud Office in 2009.

Last night sources close to the joint police and fraudbusters probe, which saw two men jailed for 20 years last week, said the MP was not implicated in the fraud itself.

But his reference was used to swindle a huge amount of money, and his role in providing the letter is likely to attract the interest of the House of Commons’ standards watchdog.

Mr Mahmood’s letter, addressed to French bank Societé General, was a character reference.

He added: “I had no idea they were fraudsters or that they would use the reference as part of a mortgage fraud. I was relatively new to being an MP when I wrote it.

“I took these people on face value. I thught they were up and coming businessmen. I will be much more careful in future.”

The bank’s decision to make the funds available would have been based on the fraudsters’ inflated valuation of the property involved, but the reference would also have been taken into account.

Mr Mahmood supplied the reference to Mozam Aziz, 39, who currently lives in a small terraced house in Alum Rock, Birmingham, in 2005.

Southwark Crown Court heard how Mr Aziz was sole director of supposedly multi-million pound firms called Highstar Properties Ltd and Goldgrade Properties Ltd.

But he was just a figurehead for the fraud and these were ‘shell companies’ used by fraudster brothers Saghir and Nisar Afzal, from Edgbaston.

Mozam Aziz

In fact, and unknown to the MP, Mr Aziz had a drink problem and a record of petty offences including stealing whisky from an off-licence.

“I was on the drink all the time back then,” Mr Aziz said when approached by the Sunday Mercury. “I didn’t know what I was doing. Saghir and Nisar were giving me drink all the time.

“They told me to do things, sign things. I was a bit frightened. They’re big men around here. They used to come here, pick me up early in the morning. They didn’t want me to mix with someone else.

“They give me bit of money sometimes, £100. They slapped me about a bit. I knew there was something to do with the MP but I don’t know what it was about.

“In school I got no exams. I can read but not much. I was a drunk then. I am an alcoholic, but not as bad as before.”

Saghir, 49, was jailed for 13 years last week for his part in the audacious £50 million fraud. His brother is wanted by cops and is living in Pakistan.

Ian “Flash” McGarry, a bent valuer who had been paid more than £1 million in bribes to inflate property values by as much as 800 per cent, got seven years behind bars.

Mr Aziz left for Pakistan in 2006. He later returned to the UK voluntarily, where he was arrested and questioned on suspicion of conspiracy to defraud. He is one of four people arrested in connection with the fraud who remain on police bail.

Mr Mahmood’s reference and past connections to the Afzal brothers have not previously been disclosed and did not feature in Saghir Afzal and McGarry’s court hearings.

The MP said he wrote the reference for Aziz some time between 2005 and 2006 after being approached by Aziz and Saghir Afzal. He knew them for about a year, he said.

He also met Saghir, Nisar and corrupt valuer McGarry for a curry in an Asian restaurant in Birmingham, and on one occasion visited the Afzals’ house.

“I knew Saghir and Nisar and Mozam for about a year. I went to Saghir and Nisar’s house once,” said Mr Mahmood.

“It was Saghir and Mozam Aziz who approached me,” he explained. “They were doing a project, at the old Smith and Nephew building in Birmingham.

“They wanted to put the Consul General’s office there. It was a community project bringing all the markets together and everything else.

“I thought it was brilliant. First of all they showed me the site at Alum Rock, the Smith and Nephew site. And there was another project in Norfolk.

“They’d already got the application, they’d got everything sorted out. They wanted to do environmental recycling for tyres. But they were getting a lot of problems from the other people on that estate. They said they were being racist towards them because they were Asian. They wanted my support to show they were OK.”

Of the reference he said: “Yes, I wrote it. I regret it now.

“I didn’t realise what they were doing. I’ve discussed it with the police. They asked me for it, and one of my assistants sorted the letter out.”

Asked if the letter was sent directly by his office to Societé General, one of the banks stung by the scam, Mr Mahmood replied: “I think it was, yes. No, no, I think they collected it.

“One of them collected it. I wasn’t in the office the day they came.”

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