Printing company bosses jailed over £3.1m tax fraud
3 Feb 2020
Five directors of an Essex printing company have been jailed over a £3.1m fraud, which saw employees' pay slashed and resulted in hundreds of thousands in unpaid taxes
3 Feb 2020
Stephen Knight, John Knight, Brian Thomas, Paul Murphy, and Philip Sach were all directors of collapsed Basildon-based large printing business Anton Group Ltd.
A subsequent HMRC investigation uncovered a series of frauds. The probe initially focused on suspected evasion of corporation tax due on profits from sales of waste paper bi-product to a local recycling company.
HMRC officers were told that the paper was given to the recycling company free of charge, in exchange for the installation and upkeep of machinery. However, investigators found that money did change hands and that Anton Group Ltd received cash payments for the waste paper.
These cash payments were controlled by chief executive officer John Knight and production director Stephen Knight, who facilitated regular ‘off record’ payments to directors and employees between April 2004 and November 2012.
Alongside non-taxed off record payments, the five received significant payments from the Anton Group Ltd, separate from any legitimate forms of payment.
Around 90 fake invoices, amounting to approximately £1.4m, were discovered in the company’s accounts. These had been declared as payments to suppliers, but the funds were siphoned off into the directors’ personal bank accounts and used to repay directors’ loans owed to the company.
During the eight-year long fraud, the directors slashed staff pay – including their own – telling employees that this would assist with cash flow and keep the business afloat. However, while it appeared they had each forfeited £5,000 of their own pay per month, the Knights, Thomas, Murphy and Sach were covertly taking money from the fraud.
Adam Kingsgate, assistant director, fraud investigation service, HMRC, said: ‘This was a high value and complex fraud involving a group of callous fraudsters who had no care for the impact of their crimes on others.
‘They were complicit in almost running the business into the ground and leaving hundreds of people without jobs.
‘HMRC is committed to taking action all those who steal from the public purse. Fraudsters who use sophisticated methods to hide their criminal proceeds should know that we are more than a match for them. No tax evader is beyond our reach.’
At the end of January, the group were sentenced for their roles in the fraud at Southwark Crown Court. The five resigned as directors of the Anton Group Ltd on 1 October 2014, when the business was sold to the Anton Employee Ownership Trust. The company ceased trading on 5 April 2017.
John Knight was given a three-year prison sentence and disqualified as a director for seven years. Stephen Knight was sentenced to 28 months in prison and disqualified as a director for five years.
Thomas has been handed down 28 months in prison and disqualified as a director for four years. Murphy was given a two-year jail sentence, suspended for two years, and disqualified as a director for three years. Sach was sentenced to ten months in prison, suspended for 12 months.
HMRC is pursuing confiscation action to recover the stolen money.