HMRC Updates: Bookkeeper Jailed After Conning Taxman

Bookkeeper jailed after conning taxman out of £240,000

A bookkeeper from Stockton-on-Tees who conned the taxman out of hundreds of thousands of pounds after lying about £1m of earnings has been jailed.

Nicholas David Riley, who traded as Dennis Riley & Co, lied about earning more than £1m to evade paying the correct amount of tax, an investigation by HMRC revealed.

HMRC said Riley “shamelessly” stole from public services and the amount he pocketed was the equivalent to the salaries of 10 newly qualified nurses for a year.

The 50-year-old failed to tell HMRC about income totalling £1,028,132 between 2011 and 2017 to pocket £241,220 in VAT and Income Tax.

HMRC started looking into Riley’s tax affairs after he submitted VAT returns in 2013 and 2014 but did not declare any income. The bookkeeper had previously received a penalty for similar wrongdoings.

Riley was charged with being knowingly concerned in the fraudulent evasion of VAT and Income Tax. He admitted VAT and Income Tax fraud at Teesside Crown Court and was sentenced to two years and four months in prison.

Proceedings are under way to recover the stolen money.

Cheryl Burr, assistant director of the Fraud Investigation Service at HMRC, said: “Riley knew the rules but chose to ignore them. He worked in a position of trust and shamelessly stole from our public services. The amount he pocketed was equivalent to the salaries of ten newly qualified nurses for a year.”

She added: “HMRC will continue to pursue criminals like Riley who think stealing tax is acceptable. I encourage anyone with information on this type of fraud to report it to HMRC online, or contact our Fraud Hotline on 0800 788 887.”

Trainee accountant guilty of £30,000 VAT fraud

Blackburn-based trainee accountant, Keiron Edmondson, received a suspended sentence at Preston Crown Court recently, after he pleaded guilty to creating fake invoices to fraudulently reclaim VAT.

An HMRC investigation found Edmondson had submitted 12 phoney invoices from his company Block Toy Store to his wife’s business Cakealicious Cakes, for non-existent work. The PQ accountant then reclaimed £30,952 VAT through his wife’s business.

In order to cause confusion the court was told Edmondson then transferred the stolen money between his and his wife’s account on ‘multiple occasions’.

HMRC’s Tim Atkins said: “Edmondson abused his financial knowledge, his employer’s trust and the public purse. He cooked up a batch of fake invoices to steal…and now has a criminal record to show for his greed.”

Edmondson admitted VAT fraud and money laundering and was sentenced to 12 months for the VAT offences and 8 months for money laundering. Both were suspended for 18 months.

He must also complete 200 hours of unpaid community work in the next 12 months. Proceedings have also started to reclaim the stolen money.

Jail for family selling illegal cigarettes on Facebook

Three members of the same Black Country household have been sentenced for selling illegal cigarettes through Facebook.

Hazell Lumbley, her ex-partner Steven Henderson, and Hazell’s daughter, Hayley Eaton, were caught by HMRC investigators who were monitored the adverts before raiding the family home in April 2017.

The trio, all unemployed, sold cigarettes from the then family home in Darlaston Road, Wednesdbury, and kept a meticulous 365-page diary of illegal sales. This helped officers estimate they had evaded £352,428.67 in duty over four years. During mitigation the trio argued the figure was much lower.

At Wolverhampton Crown Court, Lumbley was jailed for two years and three months, Henderson was jailed for two years and Eaton was handed a two-year community order.

The family members used at least six different profiles on the social media site to advertise single packs and boxes of 200 non-duty paid cigarettes in a four-year fraud.

Lumbley, 37, even offered a ‘try before you buy’ option and a ‘free delivery service’, depending on the order size and distance. The delivery car was seized on the day of the raid and only returned when Lumbley handed over £448 for its return.

Henderson, 34, admitted his part in the scam when officers arrived to arrest his partner. Lumbley’s 21-year-old daughter was arrested after officers found a book of seller usernames in her bedroom, linking her to sales.

HMRC investigators found £2,200 in cash, which was forfeited after an earlier court hearing at which the family could provide no legitimate source for the money.

Nick Stone, Assistant Director, Fraud Investigation Service, HMRC, said: “The delivery days are over for these three who are paying the price for cheating, stealing and undercutting honest, hard-working retailers who do the right thing. “People who peddle cut-price, illegal cigarettes on social media sites are depriving public services of vital funding.”

NHS ‘rock star’ managers sentenced for fraud

Men who defrauded £800,000 from a Welsh NHS board using the names of famous pop stars have been jailed for a combined total of 14 years.

Three NHS managers from Powys Teaching Health Board were found to have misappropriated NHS money by receiving ‘pay-offs’ from external contractors, after an investigation by NHS Counter Fraud Service Wales.

One of the men set up a company with the intention of paying himself for the work he was supposed to be contracting out on behalf of PTHB – from this company he invoiced the health board using false names taken from members of the rock band U2.

Cheryl Hill, deputy manager of NHS CFS Wales, said: “Defrauding NHS Wales in any capacity is totally unacceptable. The sentences at court today send out a strong deterrent message to anyone who tries to defraud NHS Wales.”

Mark Evill (47), who was assisted by Robert Howells (65) and Michael Cope (43), were handed sentences of seven, four and three years respectively.

The investigation found that Evill spent around £300,000 of defrauded money on a number of properties in South Wales, luxury holidays and expensive items like cars and watches.

Sue Firth, interim chief executive of NHS Counter Fraud Authority, said the sentencing “reflects the ways in which justice will be sought against anyone who chooses to take money from the public sector. The successful conviction is another win for the NHS and a big deterrent to those who dare to abuse it.”

Second jail term for failing to pay back £75K

A Birmingham fraudster has been jailed for a second time for failing to pay back the £75,000 he stole in a two-year tax fraud.

Craig McDougall, from Lindsworth Road, Kings Norton, was sentenced to four years in prison for evading tax by lying about the takings from his haulage business, after an investigation by HMRC.

The 47-year-old was then ordered to repay £75,777.19, but McDougall failed to pay back any of the money and has now had another 20 months added to the end of his sentence.

Debbie Porter, Assistant Director, Fraud Investigation Service, HMRC, said: “This case proves crime doesn’t pay. McDougall’s original sentence has increased by nearly 50% and he will still owe the money when he is released from his extended period in prison.

“He was given the chance to pay back the money but chose not to. Our work does not end when fraudsters are jailed. We will always try to recover the proceeds of crime and ensure they are spent on our vital public services.”
McDougall, the owner of a Wythall-based heavy goods haulage business, lied about his turnover and income for more than two years. He even claimed HMRC had lost his records, but no paperwork was ever received.

Investigators were able to check his bank records and found huge discrepancies. Officers found that during 2011 and 2013 his turnover was £830,000 and not £649,058, as McDougall had claimed.

He also said his income was only £16,995 for those years, but he withdrew more than £235,000 which he couldn’t account for.

McDougall was originally convicted of evading income tax, National Insurance and VAT and sentenced at Birmingham Crown Court in July 2017.

Restaurant owners served up jail terms for £800k fraud

Four men who ran a chain of upmarket Indian restaurants in the Midlands have been handed jail sentences totalling 10 years for an £800,000 fraud that saw them pocket staff tips and hide sales to evade tax.

Mohammed Uddin, Mizanur Rahman and Sadiqur Rahman, from Wednesbury, along with Abul Kamal, of West Bromwich, lied about takings to evade more than £500,000 in tax at their Panache restaurants, an investigation by HMRC revealed.

All four men also committed a further £295,000 in tax credits fraud by lying about their income. HMRC investigators found that the men hid the majority of their cash takings and pocketed staff tips at their Sutton Coldfield restaurant to evade tax.

The Rahmans also failed to pay £240,000 VAT on the sale of their Stafford and Lichfield restaurants.

More than £300,000 from the sale of the two properties was paid into an account controlled by Sadiqur Rahman. Some of the money was sent to Bangladesh, but it was nearly all withdrawn within 21 days. Mizanur Rahman spent money on holidays to Florida, Mauritius and Dubai.

More than £175,000 was sent to Bangladesh and rental properties were also bought in the Midlands. HMRC investigators arrested the men in 2015 and found paper and computer records at the homes of Uddin and Mizanur Rahman detailing how they had systematically suppressed cash takings.

All four admitted fraud during a hearing at Birmingham Crown Court.

The Rhamans were each jailed for three years and Uddin and Kamal both received suspended two-year prison sentences. All four men were also disqualified from acting as directors for a total of 24 years.

In jailing the men, Judge William Edis QC, said: “This was an extensive, planned and prolonged tax fraud. You systematically, regularly and frequently under declared sales at the Sutton Coldfield restaurant and kept shadow books that showed the true picture. These frauds took place over six years with the creation of a bogus paper trail.

It was sustained and planned.” HMRC has recovered more than £538,000 so far, but confiscation proceedings to recover the remaining proceeds of crime will follow.

Tax fugitive jailed for £4m fraud

One of the UK’s most wanted tax fugitives, who escaped to Ireland 12 years ago, has finally been sent to jail for committing a £5m tax fraud, and faces a repayment order for over £7m.

Former construction company boss Thomas O’Connor was convicted of cheating the public revenue after an HMRC investigation but fled before he was jailed for four-and-a-half years.

O’Connor was tracked down in Ireland by specialist HMRC officers in June 2011 and arrested by Irish police. He then launched a seven-year legal battle to try and block his extradition through the Irish court system. The case was ultimately presented to the European Court of Justice but was dismissed.

He was returned to the UK to begin his jail term and appeared at Blackfriars Crown Court in early November, where his sentence was confirmed.

O’Connor, who was living in London during his original trial in 2006, was convicted of a large-scale subcontractor fraud between September 2002 and December 2004 along with two others. The trio, who were directors of construction industry firms, produced bogus invoices to make false returns through the construction industry scheme.

O’Connor was convicted after a six-week trial and was bailed following conviction. But he failed to attend sentencing and a warrant for his arrest was issued in December 2006.

HMRC secured a confiscation order against O’Connor in 2007 to make him repay £4.2m, which has since risen to £7.9m with interest. If he does not pay the order, he will spend another five years in prison and still owe the money.