A Norfolk couple were at the centre of an international fraud investigation last night after they were linked to a ghost arms scam involving the reconstruction of war torn Iraq.

A Norfolk couple were at the centre of an international fraud investigation last night after they were linked to a ghost arms scam involving the reconstruction of war torn Iraq.

Peter and Heather Tarrant could be hauled before American courts over allegations that $8.5m fake shipping bills were created for military hardware that was never delivered.

American prosecutors say the couple, who run Zeroline from their home in Belton, near Yarmouth, took part in the large scale fraud after the fall of Saddam Hussein.

Last night the whereabouts of Mr Tarrant, 65, and his 64-year-old wife was unknown and a neighbour said she had not seen them for a while at their bungalow.

The alleged Zeroline fraud is one of about 80 investigations that the US has launched into potential waste and frauds from the billion dollar reconstruction of Iraq.

Any decision to prosecute the Tarrants will be made by the US Justice Department and the Office of the Special Inspector for Iraq Reconstruction. There is an extradition agreement between both countries.

During the chaotic aftermath of the war Zeroline was awarded a contract to supply 51 armoured vehicles to the Iraq's Interior Ministry in June 2004.

However after the vehicles were never delivered to Iraq the contract was ripped up in December 2005 by US authorities.

But because of the anarchy in Iraq, they were unaware that the $8.5m had already been paid for their delivery six months before.

The fraud allegations surfaced after Massachusetts businessman Benjamin Kafka admitted his role in the $8.5m fraud in April and agreed to cooperate with prosecutors.

Kafka worked for the American branch of Alchemie Technology Group, a London-based firm which Zeroline subcontracted the building and delivery of the armoured vehicles to.

It is claimed in legal papers recently served in a Massachusetts district court that Zeroline and Alchemie presented false documents to JPMorgan Chase bank in London in June 2005 claiming payment for the vehicles - despite the machines never being delivered.

The fake documents are said to a bill of lading - a paper to show that cargo is being transported - made out to a fictional company GNX Logistics.

Court papers state: 'Kafka knew and permitted . . .others to create a false bill of lading indicating shipment and receipt of the vehicles on a business form of a non-existent entity called GNX.'

According to Companies House, Zeroline is a private company limited by shares and as of March 31, 2008 had total assets, less current liabilities, of �135,458. Mrs Tarrant is described as its company secretary/director and her husband is listed as an engineer.

Calls from the EDP to their Station Road South home went unanswered yesterday and there was no sign of them at the bungalow. A female neighbour, who did not want to be named, said: 'To be honest I have not seen them for a while.'

Simon Ratcliffe, of Bury St Edmunds-based solicitors Greene and Greene which represents Alchemie said he could not comment on the fraud allegations due to client confidentiality.

In a recent US interview Stuart Bowen, from the Special Inspector General for Iraq Reconstruction, said that up to two dozen indictments relating to business fraud and misconduct following the fall of Saddam Hussein could be issued in the next few months.