Gian Hayer, 42, also known as Mani Singh, has received one of the longest bans the Insolvency Service (IS) has given for running Glasgow Data, a company that was turning over hundreds of millions of pounds a year in the mid-2000s, and buying and selling millions of mobile phones.
The IS found his company had "wrongfully" reclaimed over £858,000 in VAT from HM Revenue & Customs (HMRC).
Hayer, a martial-arts enthusiast whose company stopped trading in 2007 after an intervention from HMRC, was part of a chain of traders who took advantage of the differences in VAT ratings on mobile phones between the UK and other countries.
Using a scheme known as missing trader intra-community (MTIC) fraud, one trader in the operation would buy the mobile phones from places such as Cyprus, where there is no VAT on mobiles.
They would be sold on between different dealers within the UK, one of whom would go "missing", depriving HMRC of the VAT incurred on their sale transaction in the process.
The products would then eventually be sold to one of the countries with zero VAT on mobile phones, which include Spain, and the seller would claim the VAT back on their previous purchase from HMRC.
Further complicating the picture for the authorities, each trader would buy and sell similar amounts of phones at almost the same time, offsetting the VAT incurred in one transaction with the VAT due from the other, a process known as contra-trading.
Hayer's ban related primarily to three deals between April and June 2006, in which his company bought over one million phones valued at £455m and sold over one million phones valued at £456m.
Of 190 transactions involved in this business, the IS told the Sunday Herald that it had found 140 that were linked to "missing" traders and had cost the agency £48.2m in lost revenue.
According to documents filed with Companies House, the period in question formed part of Glasgow Data's most successful trading year - although the numbers do not tally with the IS's findings.
Company accounts show Glasgow Data turned over £390m in the year ended March 31, 2007, making a pre-tax profit of £1.3m.
Hayer was forced to pay back over £450,000 to HMRC in 2010 after a prohibitory property order by the Edinburgh Court of Session the year before, but he has not been charged with fraud to date.
The IS alleged that he either knew or ought to have known about the fraudulent nature of the transactions because he had received three warnings from HMRC in 2002 and 2005. It also alleged that he also ignored HMRC advice to check the VAT status of his counter-parties, carried out credit checks on them but ignored negative feedback, and failed to carry out any duel diligence on them until after the trades were completed.
The IS would not comment on whether Hayer would face criminal charges, as it has a policy of not discussing ongoing cases.
As well as Glasgow Data, other companies involved in the chains have received winding up orders, including Leeds-based Fonedealers Ltd and London-based Barato Wholesalers Ltd.
The IS, whose highest directorship ban is 15 years, said: "Mr Gian Singh Hayer caused Glasow Data Limited ... to participate in transactions which were connected with the fraudulent evasion of Value Added Tax ... such connections being something which he either knew or ought to have known."
It added: "He caused [Glasgow Data] wrongfully to claim the sum of at least £868,525 from HM Revenue & Customs."
Hayer did not return calls in time for publication.