A tax consultant, and former HMRC employee, who fled the UK before he could be arrested for masterminding a conspiracy to steal £6.9m from construction workers’ pay packets has been jailed for nine-and-a-half years
David Michael Hughes, known as Mike Hughes, 52, worked for the Inland Revenue in the 1980s before setting up as a tax consultant in Kent. He led a conspiracy which used a string of UK and offshore companies and bank accounts to steal £6.9m in taxes paid by clients and deducted from workers’ wages, through fraudulent payroll schemes.
The money from the fraud was split between Hughes and his co-conspirators.
Hughes set up, and with his co-conspirator Aquil Ahmed, operated more than 10 companies in the UK, Belize and Gibraltar to carry out the fraud, laundering the money through various bank accounts. They were co-directors of the ‘Keepers’ accountancy and taxation practices based in Rochester, Kent.
The pair then got Christopher Azzopardi to operate payroll services for clients through their various Keepers companies, claiming that they were calculating wages and paying any tax sue to HMRC through the PAYE and the Construction Industry Scheme (CIS) system. Clients were charged VAT on services, but this was never paid to HMRC.
They ran the scam payroll schemes for Victor Shearer’s construction services company Leaner Logistics Limited. He then introduced other clients to the fraudulent payroll scam.
Hughes left the UK in September 2011, travelling to Chile and Dubai before setting up home in Northern Cyprus, which does not have an extradition treaty with the UK. He was arrested by HMRC investigators at Heathrow Airport in January 2018 when he arrived on a flight from Istanbul, Turkey.
On 16 August he was jailed for nine-and-a-half years at Southwark Crown Court.
Ahmed was jailed for seven years and eight months in October 2016 and disqualified from being a company director for ten years. Shearer was jailed for seven years and six months in October 2016 and disqualified from being a company director for ten years. Azzopardi was sentenced to four years in jail.
HMRC will seek to recover the sums by pursuing confiscation, having already secured confiscation orders totalling £3.5m from Ahmed and Shearer in January 2018.
Alison Chipperton, assistant director, fraud investigation service, HMRC, said: ‘Hughes and his criminal fraternity were driven by greed, abusing systems that are designed to ensure workers are paid correctly and taxes paid to HMRC. Hughes deliberately fled the UK and moved to a country without a UK extradition treaty in an attempt to evade justice. He was arrested as soon as he returned to the UK, and is now paying the price for his crimes.
‘They were all professionals who broke the law, but as a tax consultant and former Inland Revenue employee, Hughes’ role as the criminal mastermind is even more deplorable.’
Report by Amy Austin