21 Nov 2005 03:45 PM

Financier Ian Andrew Leaf was today found guilty at Southwark Crown Court of 13 counts of fraudulent trading, following an eight year investigation by HM Revenue & Customs (HMRC).

The complex £76 million fraud centred on a company purchase scheme which involved Leaf buying 13 UK subsidiary companies which were subject to UK tax. Once Leaf acquired the companies they were used solely for fraudulent purposes.

Roger Neville HM Revenue & Customs, Senior Principal Inspector said: "This has been a long, complicated investigation into a sophisticated criminal scheme. It has been proved that Ian Leaf knowingly and deliberately set out to commit a multi-million pound fraud. The efforts made to secure today's guilty verdict reflect the seriousness of the crime, and should serve as a warning that HMRC will pursue those who attempt to steal money in this way."

Leaf will be sentenced on Thursday 1 December 2005 and confiscation proceedings will follow.

This case was successfully prosecuted by the Revenue and Customs Prosecutions Office (RCPO). RCPO is an independent prosecuting authority which reports to the Attorney General, and is responsible for the prosecution of all HMRC cases.

Notes for editors

1. Ian Andrew Leaf, DOB 29/11/53, a British national, resided in Switzerland since 1987. Last known address: Chalet Ivouette ,CH1936, Verbier, Switzerland

2. Leaf was found guilty of 13 counts of fraudulent trading, contrary to section 458 of the Companies Act 1985: one count for each of the 13 companies acquired using this particular scheme. The offence of fraudulent trading requires the prosecution to prove that the defendant was knowingly carrying on a business for fraudulent purposes.

3. When purchased by Leaf, as well as outstanding tax liabilities from past profits, the companies held enough cash to pay the tax owed. However, rather than using the money to pay the liabilities, Leaf created fictitious documents from a bank registered in the Pacific island of Nauru, controlled by him, which showed the companies had borrowed huge sums of money. The resulting fabricated interest payments were offset against tax. It was also falsely claimed that these loans were used to undertake massively profitable foreign exchange deals, not subject to UK tax out of which where paid dividends, which he then falsely used to reclaim, corporation tax rightly paid by the companies before he purchased them.

4. In respect of the 13 companies included in the indictment, the loss of tax exceeded £54 million with a further £22 million plus reclaimed, but not repaid by the Inland Revenue to Leaf.

5. RCPO was created by Royal Assent on 18 April 2005. An independent prosecuting authority, RCPO reports directly to the Attorney General, and is responsible for prosecuting some of the largest drug and fraud cases in the UK.

Issued by HM Revenue & Customs Media Relations Team