A former solicitor from Newcastle who promoted a fraudulent tax avoidance scheme which cheated clients out of £1.6m has received a suspended jail sentence and been disqualified as a director for five years.
Malcolm Graham claimed his scheme would save clients substantial amounts of money by manipulating their property transactions and tax returns to reduce their liability for stamp duty land tax (SDLT). An HMRC investigation found he had signed up hundreds of wealthy customers, charging them a 50% administration fee on any reduction in tax their scheme generated.
HMRC described the scheme as 'a complete fraud', with Graham using altered legal documents to make the scheme appear legitimate, and says it has taken action to recover the SDLT, plus interest, from Graham's clients.
Graham targeted a number of financial advisors, claiming the scheme would reduce their clients' tax liabilities. However, rather than operating a scheme to save them money, HMRC said he was reaping huge financial rewards at their expense.
Gary Forbes, HMRC's acting head of criminal taxes unit, said: 'Graham was formerly a solicitor who was struck off in 2009 for dishonest practice, so he clearly knew that altering legal documents was a criminal offence but simply chose to ignore the law for a financial gain.'
Graham pleaded guilty to seven counts of fraud by false representation at Newcastle Crown Court and received a two-year prison sentence on each count, to run concurrently, suspended for two years. He was also disqualified as a director for five years.