Forger’s VAT fraud used to pay confiscation order
19 Feb 2019
A South Lanarkshire man who used a VAT tax fraud to repay money he had previously made as forger of fake banknotes has been jailed for more than two years, following an HMRC investigation in which an officer uncovered his identity
19 Feb 2019
HMRC said John Farrell used false passports and driving licences to set up bogus companies and bank accounts to fraudulently claim £180,591 VAT repayments between 2011 and 2012.
Farrell laundered £75,000 of the money through a bogus Cypriot company account before using it to pay most of a £96,000 confiscation order imposed after he was jailed for five years and eight months for running a huge counterfeiting operation at a factory in East Kilbride producing fake banknotes.
HMRC began looking into the bogus companies after concerns were raised about the VAT claims and an officer visited Farrell who was using the name Andrew Strachan.
However, Farrell’s false identity was exposed when the eagle-eyed HMRC officer recognised him from a newspaper article about the forgery confiscation order.
Farrell’s home was searched by HMRC where more than 24 mobiles, laptops, memory cards and false passports were seized. A bag containing a laptop, paperwork relating to the bogus companies, prepaid credit cards and phone sim cards were found hidden in the eaves of the £1m mansion.
A false driving licence in the name of ‘Andrew Strachan’ containing Farrell’s picture was discovered on an electronic device recovered. Farrell was arrested and charged after interview on the same day.
Farrell pleaded guilty to VAT fraud and money laundering at Glasgow Sheriff Court and was jailed for 27 months. A serious crime prevention order (SCPO) is also being sought for when he leaves prison, which would restrict his business dealings, communications and movements once released from jail. If successful, it would be the first to be imposed on the back of a HMRC conviction in Scotland.
Cheryl Burr, assistant director, fraud investigation service, HMRC, said: ‘This was a shocking ploy by Farrell to pocket public money. His actions were one of pure greed, so he could lead a comfortable lifestyle in a house worth more than £1m.
‘He then had the cheek to use the proceeds of this fraud to repay a confiscation order imposed on him. Rather than repay the public purse, he chose to steal from it.’
An associate of Farrell’s, Michael Mullen, pleaded guilty to owning or controlling registered addresses for false businesses to facilitate the commission of VAT fraud at Glasgow Sheriff Court. He was sentenced to a he was sentenced to 200 hours of unpaid work and a restriction of liberty order between 7pm and 7am for six months.
Confiscation proceedings are underway.
Report by Pat Sweet