The gang used ‘puppet’ directors, fake invoices and bogus building contracts for housing developments as a smokescreen to hide their criminal activity. 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.
HMRC officers became suspicious after they carried out checks on a number of companies involved in the building trade across the northwest 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.
HMRC assistant director Jo Tyler 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 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.
Confiscation proceedings are under way for those involved.
Eamon Burke, 36, from Blackpool was sentenced last week to three years and eight months in prison.
At an earlier sentencing on 31 January, Adam Chadderton, aged 29, of Leyland, Lancashire was sentenced to three and a half years in prison. He was described as a key leader of the fraud and worked at Forte Accountants in Preston.
James Price, also 29 and from Liverpool, was sentenced to two and a half years in prison.
Michael Lacy, 42 and from Liverpool, got three years.
Timothy Miller, 44 and from Preston got 26 months.
John Carroll, 29, from Lytham St Annes, 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, 42 and from Accrington was sentenced to two years and eight months in prison.
Nigel Tindall, 51, also from Accrington, was sentenced to eight months, suspended for one year. He was also ordered to carry out 100 hours unpaid work and was issued with a curfew order.
Jackie Simmonds, 38 and also from Accrington, was sentenced to 20 months in prison, suspended for 18 months. She was also given a 12 month supervision order.
Lee Marsh, aged 42 and from Bolton, was sentenced to one year in prison, suspended for a year. He was also ordered to carry out 120 hours unpaid work and given a one-month curfew order.
Colin Lavelle, 37 and from London, was sentenced to two years in prison suspended for two years. He was also ordered to carry out 200 hours of unpaid work and issued with a three month curfew.
HMRC officers became suspicious after they carried out checks on a number of companies involved in the building trade across the northwest 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.
HMRC assistant director Jo Tyler 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 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.
Confiscation proceedings are under way for those involved.
Eamon Burke, 36, from Blackpool was sentenced last week to three years and eight months in prison.
At an earlier sentencing on 31 January, Adam Chadderton, aged 29, of Leyland, Lancashire was sentenced to three and a half years in prison. He was described as a key leader of the fraud and worked at Forte Accountants in Preston.
James Price, also 29 and from Liverpool, was sentenced to two and a half years in prison.
Michael Lacy, 42 and from Liverpool, got three years.
Timothy Miller, 44 and from Preston got 26 months.
John Carroll, 29, from Lytham St Annes, 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, 42 and from Accrington was sentenced to two years and eight months in prison.
Nigel Tindall, 51, also from Accrington, was sentenced to eight months, suspended for one year. He was also ordered to carry out 100 hours unpaid work and was issued with a curfew order.
Jackie Simmonds, 38 and also from Accrington, was sentenced to 20 months in prison, suspended for 18 months. She was also given a 12 month supervision order.
Lee Marsh, aged 42 and from Bolton, was sentenced to one year in prison, suspended for a year. He was also ordered to carry out 120 hours unpaid work and given a one-month curfew order.
Colin Lavelle, 37 and from London, was sentenced to two years in prison suspended for two years. He was also ordered to carry out 200 hours of unpaid work and issued with a three month curfew.