HM Revenue & Customs investigators discovered that the two men had hijacked plans of a hotel project in Mauritius.
They signed contracts with furniture providers to furnish the project and tried to reclaim over £12m in VAT from HMRC. The fraud was discovered before any money was paid out.
Around £8.8m was paid out to the fraudsters in mortgage payments, but intervention by the Metropolitan Police prevented a further £70m in fraudulent mortgage payments being made in relation to the purchase of two commercial premises.
Martin Conrad, 32, also known as Mitain Conrad, Mitain Patel, and Conrad Martin, from Mauritius, and formerly of Wimbledon, London and Surrey, pleaded guilty.
His accomplice Richard Murkin, 44, of Ashford, Kent, also pleaded guilty in January 2011 to the fraudulent attempts to obtain the VAT repayment.
They also pleaded guilty to mortgage fraud, attempted mortgage fraud and money laundering offences after a Metropolitan Police investigation.
They were both sentenced to five years for the mortgage fraud and two years for the VAT fraud, to run consecutively, at Southwark Crown Court, on Friday March 18.
When passing sentence, his honour Judge Pitts said: “This was an audacious and sophisticated fraud, which required expert synchronisation.”
Chris Martin, assistant director of criminal investigation for HMRC, said: “HMRC worked alongside the Metropolitan Police to bring these fraudsters to justice.
“Tax evasion is serious, blatant theft and we will continue to pursue those trading fraudulently to the full extent of the law.”
He added: “The sentences handed down will serve as a deterrent to anyone who thinks that fraud is a risk worth taking.”
Detective constable Simon Hanrahan, from the Metropolitan Police’s Money Laundering Investigation Team, said: “Both Martin Conrad and Richard Murkin have been responsible for a series of audacious frauds which have caused substantial losses to financial institutions and much distress to innocent people who have found their homes sold without their knowledge.”