£9.8m VAT fraud one of HMRC’s top criminal cases in 2018
3 Jan 2019
A church leader who lied about charity donations to fraudulently claim £150,000 Gift Aid repayments and five fraudsters who falsely claimed £13m in tax repayments are two cases which have made HMRC’s top 10 criminal cases of 2018
3 Jan 2019
HMRC’s fraud investigations have led to 671 people being convicted over the last 12 months for their part in tax crimes. In addition, HMRC has charged another 919 people and taken on 746 new criminal investigations.
Last year’s top 10 prosecutions include a tax consultant, who fled the UK before he could be arrested for masterminding a conspiracy to steal £6.9m from construction workers’ pay packets. David Michael Hughes travelled to Chile, Dubai and Cyprus to evade justice and was eventually arrested at Heathrow airport after arriving from Istanbul. On 16 August he was jailed for nine-and-a-half years at Southwark Crown Court.
One of the largest frauds on the list involved a businessman who masterminded a £9.8m international VAT fraud. Jason Butler, formerly of Leeds, created hundreds of false invoices to claim millions of pounds in VAT and tried to hide the scam in a complicated trading chain involving companies in the UK, Gibraltar, Spain and the US. Butler was arrested by police at Manchester International Airport when he arrived in the UK from Malaga in January 2015. In March 2018 he was found guilty at Leeds Crown Court and was sentenced to nine years in prison.
Another case involved the manager of a well-known male stripping troupe, who was sentenced in her absence for tax and benefit fraud after more than a year spent on the run. Laurel Goodman, manager of stripping troupe Dream Idols, absconded before being sentenced to 28 months' imprisonment in September 2016. Together with business partner Barry Solomons, Goodman failed to declare income of more than £219,000 to HMRC between 2007 and 2013, evading £57,000 in income tax. Solomons was given 28 months on 19 September 2016 and has served his sentence. Goodman was sentenced in her absence to 28 months in prison on the same day, and a warrant issued for her arrest. Goodman appeared at Blackfriars Crown Court on 5 April 2018 via video-link from HM Prison Peterborough where she admitted skipping bail and was ordered to serve an extra four months on top of her original sentence.
A church leader from Luton, who lied about charity donations to fraudulently claim £150,000 Gift Aid repayments and was jailed for four years also featured on HMRC’s list. Teslim Johnson used his position as a preacher and trustee at Luton’s Agape Church to process Gift Aid repayment claims. HMRC investigations found that as Johnson was the only person named on the church’s bank accounts, he was able to divert money from these fraudulent claims into his personal bank account. He received repayments of £103,154 and attempted a further £52,686, bringing the total value of the fraud to £155,840.
Other crimes on the list include a tax fugitive owing more than £53m for tobacco smuggling fraud and a Hemel Hempstead company director who funded his hobby, racing high-powered sports cars in races across Europe, through a £450,000 tax scam.
HMRC says that its Fraud Investigation Service brings in around £5bn a year through civil and criminal investigations.
Mel Stride, Financial Secretary to the Treasury, said: ‘HMRC’s investigative teams have been working hard to crack down on tax crimes in the UK, and hold those who would cheat the public revenue to account. The range of cases in this year’s list demonstrates how HMRC will always tackle fraud and can prosecute anyone who steals from the public or breaks the rules - from smugglers to potential arms dealers.
Simon York, Director of the Fraud Investigation Service, said: ‘As these cases show, HMRC can and will tackle the most serious tax crime and breaches of sanctions whether committed by organised criminals, professional advisors or wealthy individuals.
‘We remain resolute and relentless in our determination to level the playing field and bring tax criminals to justice on behalf of the majority of citizens who pay their tax to fund vital public services.’
HMRC’s top 10 prosecutions of 2018 are here.
Called to account: best of 2018 - 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 2018 is here.
Report by Amy Austin