Fake Contractors Jailed For £4m VAT Scam

UK

E

leven members of a gang who set up 23 fake construction companies to steal £4m in a VAT fraud have been sentenced.

The gang used ”puppet” directors, fake invoices and bogus building contracts for housing developments as a smokescreen to hide their crimes.

People were paid up to £35,000 to act as directors and allow the gang to use their names and addresses to set up the bogus companies, with the sole purpose of claiming illegal VAT refunds.

HM Revenue and Customs officers became suspicious after they carried out checks on a number of companies involved in the building trade across the North West of England.

They discovered that many of the companies were linked – regularly providing services to each other and using the same accountant.

They also used the same invoices, receipts and accounts figures to make sizeable claims for VAT refunds.

Jo Tyler, Assistant Director, Criminal Investigation, HMRC, said: “We identified suspicious trading by several companies, all of which ultimately led to fraudulent VAT repayment claims.

“The gang ran the fraud from premises in Preston and then filtered the money through company bank accounts with large sums of cash shared out between those involved or transferred abroad.

“This was a deliberate attack on the UK VAT system to fund criminal lifestyles.

“Tax fraud and attempts to launder the proceeds of crime are treated extremely seriously by HMRC, and we will relentlessly pursue any individuals or crime gangs believed to be involved.”

Several key players in the fraud were put under surveillance as evidence built up against the gang and in 2011 HMRC officers searched 21 premises, making 16 arrests across the North West and in Sussex.

Officers found that all of the companies had been using fake invoices and receipts from some of the UK’s leading building suppliers, none of whom had ever dealt with or heard of the companies run by the gang.

The gang also produced fake contracts for work, including a £3.5m housing development in the West Midlands in order to make their work in the building trade look legitimate.

HMRC found 23 companies involved in the chain which had traded for approximately 18 months in an attempt to defraud UK taxpayers out of £4,328,386.

Most of the companies had never carried out any building work or traded legitimately during the period of the fraud.

Ten of the 13 gang members were jailed at Manchester Crown Court on Friday 31 January 2014 and one was jailed at Manchester Crown Court today.

Confiscation proceedings are under way for those involved.

The following gang members were sentenced on Friday 31 January 2014 at Manchester Crown Court:

·  Adam Chadderton of Leyland, Lancashire was found guilty and was sentenced to three and a half years in prison. Chadderton was one of the key leaders in the fraud, working at Forte Accountants based on New Hall Lane, Preston.

·  James Price of Landford Place, Liverpool was found guilty and sentenced to two and a half years in prison.

·  Michael Lacy of July Road, Liverpool pleaded guilty and was sentenced to three years in prison.

·  Timothy Miller of Arnhem Road, Preston pleaded guilty and was sentenced to 26 months in prison.

·  John Carroll of Millbrook Mews, Lytham St Annes, Lancashire pleaded guilty and was sentenced to two years in prison, suspended for two years. He was also ordered to carry out 200 hours unpaid work and given a three month curfew between the hours of 9pm and 5am.

·  William Ainsworth of Ribblesdale Avenue, Accrington pleaded guilty and was sentenced to two years and eight months in prison.

·  Nigel Tindall of Hope Street, Accrington pleaded guilty and was sentenced to eight months in prison, suspended for one year. He was also ordered to carry out 100 hours unpaid work and was issued with a one month curfew between the hours of 9pm and 5 am.

·  Jackie Simmonds of Ribblesdale Avenue, Accrington pleaded guilty and was sentenced to 20 months in prison, suspended for 18 months. She was also given a 12 month supervision order.

·  Lee Marsh of Greystone Close, Bolton pleaded guilty and was sentenced to one year in prison, suspended for one year. He was also ordered to carry out 120 hours unpaid work and issued with a one month curfew between the hours of 9pm and 5am.

·  Colin Lavelle of Hazelwood Lane, London pleaded guilty and was sentenced to two years in prison suspended for two years. He was also ordered to carry out 200 hours of unpaid work and issues with a three month curfew between the hours of 9pm and 5am.

·  Lee Marsh of Greystone Close, Bolton pleaded guilty and was sentenced to one year in prison, suspended for one year. He was also ordered to carry out 120 hours unpaid work and issued with a one month curfew between the hours of 9pm and 5am.

·  Colin Lavelle of Hazelwood Lane, London pleaded guilty and was sentenced to two years in prison suspended for two years. He was also ordered to carry out 200 hours of unpaid work and issues with a three month curfew between the hours of 9pm and 5am.

The following gang members were sentenced on 14 February 2014 at Manchester Crown Court:

·  Eamon Burke of Redwood Close, Blackpool was found guilty and sentenced to three years and eight months in prison.

A further hearing will take place at Manchester Crown Court on 25 February 2014 to sentence:

·  John Hardman of Coniston Road, Preston who pleaded guilty at an earlier hearing.