Tuesday, November 14, 2017
The UK tax authority, HM Revenue and Customs, has welcomed prison terms for members of a crime group for perpetrating what the agency called one of the biggest ever tax crimes in the UK.
The six perpetrators were given sentences totalling 45 years for devising a fake eco-investment scheme as a tax break for wealthy investors, in a GBP107.9m (USD141.6m) fraud.
In the latest of a string of operations to tackle serious multimillion-pound frauds by wealthy professionals, HMRC investigators stopped the group, which comprised bankers, businessmen, a solicitor, and an engineer.
The men, led by Michael Richards, 55, from East Sussex, lured wealthy individuals to invest in largely fake environmental projects with the promise of a tax break. HMRC said an intensive, far-reaching, and forensic investigation lasting ten years revealed the scheme was nothing more than a fraud based on a complex series of contrived bank and paper transactions.
The group used the investors' money to fund their lavish lifestyles, buying properties around the world, expensive jewelry, and luxury holidays.
Simon York, Director of Fraud Investigation Service, HMRC said: "This was an audacious and cynical fraud on an astonishing scale, characterized by greed and a complete disregard for the ecological causes the perpetrators claimed to be supporting. Instead the group spent investors' money on their own lavish lifestyles. These individuals thought they had worked out the perfect fraud. At every step they used contrived offshore structures, complex transactions, and blatant lies in an attempt to hide their tracks and derail our criminal investigation. But the determination and professionalism of our teams has shown, yet again, that we will not hesitate to bring fraudsters to justice. Work has now begun to recover the proceeds of this crime in order to fund vital public services."
HMRC said Richards, the "self-styled ringmaster and originator of the fraud," led the group to create and trade Carbon Emission Reduction Certificates which help countries hit environmental emissions targets set by the United Nations.
They were found guilty by a jury on November 10, 2017. Sentencing the men, Justice Andrew Edis said: "It was utter dishonesty, sophisticated planning, and astonishing greed hidden behind a mask of concern for the environment."
HMRC said there is no evidence to suggest investors knew the scheme was a scam or that their money was not being spent on research and development. Nevertheless they have been instructed to pay back the money they received from HMRC.