NAT 71/09
Three financial advisers were amongst eight people jailed today
for their part in a VAT fraud amounting to almost £2million. The
eight were part of a gang of eleven who had set up fictitious
companies claiming to be trading in animal feeds, children’s
clothing and fruit and vegetables. They also created business
expenses associated with the non-existent companies to evade
paying VAT to HM Revenue & Customs (HMRC).
The gang registered 15 bogus companies between 1998 and 2004
across Merseyside, Cheshire, Derbyshire, Leicestershire and
Scotland creating fictitious sales transactions and invoices for
zero-rated goods in the conspiracy to evade paying VAT whilst
pocketing reclaimed VAT for fake business costs.
Eight individuals from the conspiracy were sentenced today. These were:
John Wright (aged 46) sentenced to six years jail, Gary Edgington
(55) sentenced to four years, and Neil Banks (24) sentenced to 240
hours unpaid work, all from Cheshire;
Peter Wood (52) from
Manchester sentenced to four years eight months in
jail;
Michael North (70) from Stockport sentenced to 15 months
in jail;
Diane Bellingham (53) sentenced to 12 months jail
and George Duncan (45) sentenced to 32 months, both from Scotland;
and
Emma Vasey (35) from Washington, Tyne and Wear sentenced
to 18 months jail.
Edgington, Wood and North are all
financial advisers. The other defendants are due to reappear in
court at a later date.
Mike O’Grady, HMRC Assistant Director Criminal Investigations
North West said:
“Those sentenced today include three self-employed financial
advisors who opened bank accounts to facilitate the frauds, helped
with the purchase of properties for gang members using the money
obtained from the fraud and in some circumstances completed false
invoices. They abused their positions of trust to line their own
pockets and those of their co-conspirators and the sentences
handed out by the court today reflect how seriously this crime is taken.
“VAT fraud is a serious crime which diverts vital income from the
UK’s public services into the pockets of career criminals and HMRC
will do everything in its power to put a stop to this.
“The gang used the fraud money to invest in property portfolios
and fund their lifestyles. The total VAT fraud amounted to about
£1.9million and those jailed now face confiscation hearings to
recover monies and assets involved.”
Background
Suspicions were raised when some of the gang forwarded false
invoices to HMRC, others deferred or aborted attempted visits by
Customs & Excise (now part of HMRC) officers who were
attempting to verify these business claims and make routine tax
inspections of their company accounts. The case was passed to HMRC
criminal investigators and more fraudulent businesses were
discovered linked to the conspiracy.
During the investigation analysis of bank accounts declared by
the defendants shows that the only money going into them was from
the VAT repayment system – they were not genuine business
accounts. The monies were then systematically withdrawn through
cash machines by the individuals involved.
Hand writing samples were analysed by a forensic scientist
against invoices, VAT returns and other documents proving that in
many cases the handwriting on invoices matches those on documents
supplied to HMRC during the fraud. Many of the faked invoices were
found on computers used by the fraudsters. Most of the invoices
were bogus although some included hijacked details of legitimate
traders.
Following the initial investigation, arrests were made in June
and October 2005 when more evidence was collected during business
and house searches. The evidence gathered led to fraud related
summonses being issued in March 2008 to fourteen people who were
charged with conspiracy to cheat the public purse. Before the
trial started in 2009 seven individuals pleaded guilty once faced
with the evidence against them. The remaining seven stood trial
and four were found guilty by jury and three were acquitted. Eight
of the eleven fraudsters were sentenced today and three will be
sentenced at a future date.
Notes to Editors
Photographs of the fraudsters are available on request from the
press office. (Where available, it is indicated in the individual
summaries below).
North West fraudsters
John Paul Wright (born 10/09/63) of Bridge Lane,
Appleton, Warrington, Cheshire was found guilty (by whole jury) on
12 August 2009 at trial. He was sentenced to six years on 21
October 2009. Wright was employed in light haulage and building
work but in reality was one of the main players behind the
registration of several companies used in the VAT fraud trading in
animal feed supplies and children’s clothes. He used a hijacked
identity at times and operated a number of the bogus companies in
conjunction with Gary Edgington and Peter Wood and possibly
others. Photograph of Wright available.
Peter Wood (born 21/03/57) of Dalton Gardens, Urmston,
Manchester pleaded guilty before the trial began and was sentenced
to four years eight months today. Wood was a self-employed
financial advisor who specialised in tax advice (he told
investigators in interviews that he had previously worked for the
Inland Revenue in the 1970s and 80s). Wood helped with the
purchase of properties for the gang and in some circumstances
completed false invoices in the fraud – he was identified in court
as one of the main players who had much more than just an
accountancy role. Photograph of Wood available.
Michael North (born 13/10/39) of Meadow Lane, Disley,
Stockport was found guilty (by majority verdict) 12 August 2009
and was sentenced to 15 months today. North another financial
advisor operated from premises on Union Road, New Mills, High Peak
in Derbyshire and he also helped with the purchase of properties
for gang members and in some circumstances completed false
invoices. North had had close links to the O’Briens in Scotland.
In court HH Judge George commented if North had been younger he
would have received 24 months in jail.
Neil Robert Banks (born 11/12/84) of South West Avenue,
Bollington, Macclesfield, Cheshire pleaded guilty before the trial
began and was sentenced to 240 unpaid community service today.
Banks was a close family friend of the O’Briens (who will be
sentenced separately) and in the case he was registered as the
sole proprietor of a ‘fruit and veg’ company linked to the fraud
(supposedly trading in Scotland). Photograph of Banks available.
Gary John Edgington (born 03/01/54) of Water Street,
Bollington, Cheshire pleaded guilty before the trial began and was
sentenced to four years today. He was also a self-employed
financial advisor who assisted with the purchase of properties and
in some circumstances completed false invoices – another seen as a
main player in the VAT fraud who is understood to have received
large amounts of money from the gang’s activities. Photograph of
Edgington available.
North East fraudster
Emma Haughan (nee Vasey) (born 01//07/74) of Sulgrave
Road, Washington, Tyne and Wear was found guilty (by majority
verdict) on 12 August 2009 and was sentenced to 18 months in jail
today. Emma was shown in court to have created false invoices to
support the claims which were sent to HMRC. She was paid directly
from the bank accounts receiving the VAT repayments. She worked
with / for / and had close links to Wright, Wood and Edgington
three of the main players in the fraud conspiracy. The company in
the fraud she was ‘working’ for ‘traded’ mainly in the north west
of England. Photograph of Haughan available.
Scottish fraudsters
Diane Bellingham (now Milne) (born 01/05/65) of Mid
Street, Keith,, Scotland pleaded guilty before the trial began and
was sentenced to 12 months today. Diane was the wife of Edward
Bellingham at time of their arrests and she was registered as the
sole proprietor of an animal feed company linked to the fraud
(supposedly trading in Scotland). Diane also set up other bogus
companies with her, then, husband. Edward is to be sentenced separately.
George Alexander Duncan (born 02/02/64) of Cedar
Bungalow, Drumnagoroch, Huntly, Scotland pleaded guilty before
trial began and was sentenced to 32 months jail today. Duncan was
registered as the sole proprietor of an animal feed company linked
to the fraud (supposedly trading in Leicestershire) – yet another
bogus business.
In addition to Edward Bellingham, two others, Daniel and Marie
O’Brien of Rainbow Cottage, Aultmore, Keith, Aberdeenshire
Scotland, will be sentenced separately.
Some of the Scottish individuals were supposedly trading in
Derbyshire and Leicestershire, and it was part of the whole gang’s
tactic to trade in and register for VAT in different areas from
their home locations deliberately in an attempt to disguise the
fraud and their connections in the conspiracy. But investigators
tracked them down despite their attempts to evade visits from
officials and keep a geographical spread in the fraud.
The gang used the fraud money to invest in property portfolios
and fund their lifestyles. The total VAT fraud amounted to about
£1.9million and those jailed now face confiscation hearings to
recover monies and assets involved.
All the individuals were charged with conspiracy to cheat the
public purse.
To report information related to fraud the public can contact the
Customs Hotline on 0800 59 5000 or email customs.hotline@hmrc.gsi.gov.uk.
Issued by HM Revenue & Customs Press
Office
Press enquiries only please contact:
Contacts:
HMRC Out of Hours
Phone: 07860 359544
NDS.HMRC@coi.gsi.gov.uk
Beryl St.James
Phone: 020 7147 2314
beryl.st.james@hmrc.gsi.gov.uk