THE ringleader of a gang responsible for a £778,000 VAT fraud was reported dead in a bid to put off investigators.

But Tasejad Hussain Jeffrey is now starting a jail term after being convicted, along with his partner and two sisters, of conning the taxman out of hundreds of thousands of pounds.

Jeffrey, 32, of Carr Lane, off Meins Road, Blackburn, was behind Global Spirit Airlines, which was billed as the first East Lancashire airline offering flights from Manchester to Pakistan cap-ital Islamabad.

But, after costs of the enterprise spiralled ‘out of control’, Jeffrey – who bought the title ‘Lord of Knightsbridge’ in 2006 – began to create false accounts of scores of subsidiary companies to falsely claim VAT receipts.

The Manchester Crown Court hearing today heard that much of the cash fraudulently claimed from the government was sent to an account in Dubai, held by his brother Subthain Hussain.

When a Customs and Revenue investigation was launched, the cash was traced to his brother.

But he told officials that Jeffrey had died – a move that initially put off the inquiry for a month, the court heard.

Jeffrey was in fact seriously ill with a rare condition called Barrett’s Esophagus, which affected his ability to eat and drink.

In total Jeffrey, along with his co-accused sisters Asmat Sultana Hussain, 38, of Royshaw Avenue, and Fiza Ghulam Hussain, 37, of Bradshaw Close, both Blackburn, and his civil partner Bijan Khoshabi, 28, also of Carr Lane, falsely claimed £778,000, and tried to claim a further £310,000 which was rejected.

The offences took place between 2005 and 2009.

Jeffrey’s barrister Nigel Ingram said: “He was desperate for money to make his dream of running the airline a reality.

"Then he met someone socially who suggested the idea of the VAT fraud.

“It is an indication of his desperation that he considered it and then went through with it.”

Jeffrey set up an umbrella company, the Jeffrey International Group, with a variety of front companies used to falsify VAT repayment claims.

These companies ranged from fast food and real estate, to an airline alleged to be picking up the route from Manchester to Pakistan vacated by British Airways.

Jeffrey pleaded guilty to two counts of conspiracy to cheat HM Customs and Excise.

He was sentenced to 34 months in prison, and disqualified from being a director for eight years.

Khoshabi, an Iranian national who Jeffrey met in Dubai while fundraising in 2006, could now face deportation once his 22-month sentence is over after pleading guilty to the same two counts as Jeffrey.

He was disqualified from being a director for six years.

Asmat, a mum of six, pleaded guilty to laundering the proceeds of crime in relation to a company in 2007.

Fiza, who is pregnant and a mum of four, admitted a charge of VAT evasion at a single company, also in 2007.

The sisters were both ordered to complete an 18-month community order and made subject to a 9pm to 5am curfew for two months.