Accountancy brings you a selection of cases involving members of the accounting profession – and a few others – who did not escape the long arm of the law during 2017
Jail for accountant who stole £350k in VAT
A Somerset accountant has been jailed for two years and three months for failing to pay £358,283 in VAT to HMRC, instead keeping the money as cashflow for his business.
Stephen Love was a director of construction company J B A Martin Ltd, of Aldershot, Hampshire and of Wessex Accountants Ltd which looked after the building company’s accounts.
He admitted pocketing the VAT he charged his clients between 1 January 2011 and 31 March 2015, and using the money as cashflow for his business.
Love pleaded guilty at Yeovil Court on 12 July 2017 and was sentenced at Taunton Crown Court on 4 August 2017 to two years and three months in prison.
Family trio jailed for record £45m tax fraud
A family of fraudsters have been jailed for over 27 years after being found guilty of stealing more than £45m in the largest payroll VAT scam uncovered in the UK.
Geoffrey Copp, 55, his son Joshua Copp, 24, and brother Andrew Copp, 51, were sentenced at Wood Green Crown Court on 9 June. Geoffrey was jailed for 10-and-a-half years, Joshua received eight years and Andrew was handed nine years.
The trio ran Central Payroll Specialists, which was later rebranded as Quality Premier Services. These were umbrella payroll companies, which were used by recruitment agencies to manage the wages of thousands of temporary workers.
Over the course of three years, the Copps did not pass the VAT they received from the recruitment agencies to HMRC.
An investigation found that in 2013-14 Joshua transferred £2.4m to his personal bank account from Central Payroll Specialists with a further £9.2m being transferred to him in 2014-15.
The companies paid just under £4m in VAT between September 2012 and 2015, with HMRC investigators estimating there was just under £46m in unpaid VAT. Tax records also showed that Geoffrey and Joshua paid no income tax between 2009 and 2015, while Andrew had paid £15,930.
In March 2016, all three Copps were charged with conspiracy to cheat the public revenue and conspiring to conceal, disguise, convert, transfer or remove criminal property. All were found guilty of the charges against them at a trial at Wood Green Crown Court on 5 June.
Accountant fined £75k over pensions advice failures
Belfast accountant David Watters has been fined £75,000 by the Financial Conduct Authority (FCA) for failing to exercise due skill, care and diligence in his role as compliance oversight officer, firstly at FGS McClure Watters and then Lanyon Astor Buller Ltd.
The FCA found that Watters failed to take reasonable steps to ensure that the process in place at FGS and Lanyon Astor Buller, for giving advice on enhanced transfer value pension transfer exercises, was adequate and met regulatory standards.
The regulator said this led to a serious risk of unsuitable advice being given to customers of FGS and LAB about the merits of transferring their pension, from a defined benefit to a defined contribution scheme, as part of an enhanced transfer value pension transfer exercise.
Approximately 500 customers that received advice from FGS or Lanyon Astor Buller transferred their pensions from a defined benefit scheme to a defined contribution scheme, with a combined value of approximately £12.7m. In many cases, it may have been unnecessary for customers to leave their defined benefit schemes, thereby losing their guaranteed benefits.
The FCA said Watters failed to give sufficient consideration to whether the advice process was compliant; he did not take reasonable steps to gain a sufficient understanding of the relevant regulatory requirements; and did not obtain an appropriate third party review of the processes to ensure compliance.
Watters also failed to take reasonable steps to ensure that advisers were properly monitored to reduce the risk of unsuitable enhanced transfer value pension transfer advice being given to customers.
Ex-ICAEW committee member sentenced for £45k VAT fraud
Keith Liddiard, a former member of ICAEW’s commercial advisory committee, has been given a suspended prison sentence for a £45,000 VAT fraud discovered following an HMRC investigation.
Based in Tonbridge in Kent, Liddiard was a business and HR consultant, and the director of Liddiard Associates Company Ltd, which he registered for VAT in August 2010. He deregistered the company retrospectively in December 2012, backdating it to October 2010 claiming that was when it had ceased trading.
However, HMRC found invoices and business records which revealed he continued to charge VAT to his unsuspecting customers between 31 December 2010 and 30 November 2012 when he was supposedly no longer in business.
This was before Liddiard joined the ICAEW’s commercial advisory committee as a non-executive member in 2013.
Rather than pay the VAT to HMRC, Liddiard pocketed £44,870 via his personal bank account. The fraud was discovered through VAT compliance checks and referred for investigation.
Liddiard was found guilty at Canterbury Crown Court after a seven-day trial and sentenced to nine months in prison, suspended for two years. He must also complete 100 hours of community work and pay costs of £2,900.
After being found guilty of VAT fraud Liddiard repaid the outstanding money he fraudulently obtained.
Accountant in £200k fraud at London Metal Exchange
Annmarie Norris, who worked her way up to become head of the accounting department at the London Metal Exchange despite not having a professional qualification, has been jailed for 32 months for a £200,000 fraud, which the court heard was facilitated by ‘extremely lax’ accounting practices.
The trial at the Inner London Crown Court was told that Norris admitted using seven LME credit cards and withdrawing cash to pay for a Caribbean cruise, a Greek holiday, dental work, a new kitchen and decking for her garden at her house, among other luxury items.
Norris, who joined the Exchange in 1997, was promoted to head accountant in 2011, earning £72,000 a year plus bonuses when she was dismissed in October 2015.
The fraudulent activity took place at the London Metal Exchange between December 2012 and July 2015 and amounted to £204,405. The prosecutor in the case suggested that ‘chaotic’ and ‘extremely lax’ accounting policies had meant it took a while for the losses to come to light. The court was told Norris’ annual salary at the time of the offences was around £103,000.
Norris will serve half of the 32-month sentence and will have to pay restitution to her former employers.
Takeaway boss jailed for £179k tax fraud
A Warrington fast food takeaway boss, who lied about his shop’s takings as part of a £179,000 tax fraud, has been jailed for 30 months, following an HMRC investigation.
Mehmet Tekagac claimed he made around £9,000 a year from the Top Grill Kebab and Pizza House between January 2012 and October 2015.
HMRC investigators found he earned far more after examining bank records, his personal income and records of sales made through a website.
Tekagac hid his takings to evade paying £31,244 in corporation tax. He also pocketed more than £98,000 VAT he charged customers and claimed £49,528 in child tax credits as a low income family of six during the fraud.
On 20 September, Tekagac was sentenced to 30 months in prison at Liverpool Crown Court. He pleaded guilty to three counts of tax fraud totalling £179,154.
Fake spy in £1.6m VAT fraud
A company director, who ran a fake security company to carry out a VAT fraud of more than £1.6m while pretending to friends and family to be a spy who frequently worked abroad, has been jailed.
Raymond Thomas claimed to run a business called Cambridge Computer Graphics that he said manufactured and serviced aviation radar systems. He also claimed to have worked for the US Departments of Defense and Homeland Security.
HMRC’s investigation found the business was a sham and Thomas had created a string of false invoices using hijacked company details to support fraudulent VAT refund claims between 2008 and 2013.
Despite this, Thomas told investigators he worked for US Homeland Security and produced key components for a drone.
The crime was uncovered after a HMRC officer visited Cambridge Computer Graphics and found discrepancies in the business records following a claim for £98,000 in 2014. During the visit, Thomas said his work for the US meant he had to destroy associated paperwork.
Checks with the US departments and other alleged suppliers revealed no business took place and invoices provided to HMRC were forged.
Thomas told friends and family he was a spy and claimed to be working overseas when he was actually holidaying with his wife, Susan Weston at properties they owned in Berlin, Kefalonia and Perpignan. His wife helped launder the stolen money using her personal bank accounts.
Thomas admitted VAT fraud, money laundering and producing false documents at Manchester Crown Court and was given a 56-month jail term. Weston was given a 12-month suspended sentence for money laundering.