A group of film producers, accountants, financial advisers and investment bankers - including one from Bucks - who attempted to cheat the tax system out of £2.2 million have been jailed for more than 36 years after a complex investigation by HM Revenue and Customs (HMRC).
The scheme, cooked up by wealthy professionals, involved claiming false tax rebates linked to contrived investments in film-making partnerships.
The partnerships claimed to have spent £5.7 million and made significant financial losses on two UK film projects, ‘Starsuckers’ and ‘Mercedes the Movie’. These artificial losses enabled the wealthy investors to falsely claim back around £40,000 in tax relief for every £20,000 they had invested.
HMRC identified a series of suspicious tax rebate claims, which investigators discovered had originated from two fraudulent tax avoidance schemes that had been set up and managed by Monaco-based accountant Terence Potter, 56. The claims were supported by false documents produced by Potter.
Jennie Granger, director general, Enforcement and Compliance, HMRC, described the con as an ‘audacious attempt to defraud HMRC and was motivated by the pure greed of dishonest and wealthy individuals’.
“The majority of those involved in this fraud had no interest in the film industry, or regard for the impact of their criminality on honest taxpayers,” she said.
“After painstaking and complex work from our investigators, and a series of long trials, HMRC has dismantled the fraudulent operation, and shown that we have the intent and capability to bring criminals to justice regardless of their resources. The long sentences handed down send a powerful message to those tempted to deceive HMRC. Nobody is beyond our reach.”
Potter not only devised and promoted the schemes to wealthy professionals, he produced false documents in a bid to make the schemes look legitimate. He was assisted by independent financial adviser, Neil Williams-Denton, 42, who also promoted the schemes to high earning investment bankers.
Three investment bankers, Phillip Jenkins, 51, James Hyde, 43, of HM Prison Service and formerly of Grove Farm, Ivinghoe Aston, Buckinghamshire, was found guilty and sentenced to four and a half years in prison. Hyde was an investment banker working for Jeffries International at the time of his arrest and invested almost £100,000 in the scheme. and Hamish MacLellan 43, were each convicted of one count of Conspiracy to Cheat the Public Revenue, and sentenced to 13 and a half years in prison, collectively. And, in the latest trial, two independent film producers, Chris Walsh Atkins, 40, and Christina Slater, 37, were convicted of Conspiracy to Cheat the Public Revenue, theft and fraud and sentenced to a total of nine years in prison on Friday. Their role in the fraud was to circulate money and produce falsely inflated invoices.
More than 100 officers from HMRC’s Fraud Investigation Service took part in the operation that led to the arrests in February 2012. Eighteen properties were searched and computers, business records and mobile phones were seized.
The majority of the tax refunds claimed by investors were withheld and £500,000 which had been paid out initially, has since been recouped by HMRC.
Investigations to recover further proceeds of the crime are under way.