On 21st July 2016, after a six week trial, three people, Aquil Ahmed, Victor Shearer and Christopher Azzopardi were convicted at Maidstone Crown Court of conspiracy to cheat the Public Revenue with Ahmed having previously pleaded guilty. Additionally, Shearer was also convicted of laundering his £1.2m share of the proceeds of the frauds.
According to HMRC, the three men, including accountant Aquil Ahmed; Victor Shearer, a construction services company director; and Christopher Azzopardi, a payroll administrator, all from Kent, defrauded HMRC of VAT, income tax, National Insurance contributions and construction industry scheme deductions over two-and-a-half years.
So, how did it work?
Between 2010 and 2012, Ahmed offered “umbrella” payroll services to his clients who primarily offered agency services to supply labour.
Together with Azzopardi, he did this through a web of UK-registered companies and bank accounts and invoiced their clients for their workers’ wages, income taxes and VAT through these accounts. However, the fraud occurred when they failed to pay the tax and NI to HMRC.
The money in question was laundered through a companies in Gibraltar and Belize, and from there was transferred to bank accounts held in Jersey, Guernsey, Spain, Switzerland, Turkey, USA, South Africa, Dubai and Chile.
Where did Shearer come into this? He was the sole director of London based Leaner Logistics which supplied temporary and casual labour to some well-known names in the construction industry including Mace.
Shearer acted as a client of Ahmed’s payroll service and in return received a £1.2m share of the unpaid taxes over its two-year operation.
But it did not stop there, the rest of the proceeds from the fraud were shared between Ahmed, his business partner, and the directors of his other client companies who had lent themselves to the fraud.
Chris Gill, Assistant Director, Fraud Investigation Service, HM Revenue & Customs, said: “HMRC uncovered this complex and sophisticated fraud, operated through a multitude of UK and offshore companies. The fraudsters abused the tax system which is designed to ensure workers are paid correctly, and taxes are paid to HMRC”.
To give some idea of the scale and complexity of the case:
HMRC spent nearly two years over their investigations as it involved companies and bank accounts across the world, and
The evidence amounted to in excess of 30,000 pages. This took 5 weeks’ time at Maidstone Crown Court, and The jury took 3 days to convict both Shearer and Azzopardi on all charges, bearing in mind Ahmed had pleaded guilty on the first day of the trial. Sentencing will take place on 5th August 2016.Comment
This is the biggest tax and NI fraud we have ever come across and it makes us wonder at the amount of time and effort that Ahmed, in particular, must have put into it.
Do you have procedures in place in your organisations to prevent such frauds taking place?
ShareShare £6.9 million tax fraud – PAYE, NI, CIS and VAT
