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VAT frauds investigated

Member: Nifa

Two separate VAT frauds have been uncovered this week by forensic investigators and, ironically, both were carried out by men with claims to be on first-name terms with celebrities here and in America. One, who described himself as a “designer to the stars”, pretended that he was running a multi-million pound clothing empire. However, investigators from HM Revenue & Customs (HMRC) discovered that he had only imported jeans worth £24,000 from the US, which he passed around an “elaborate web” of 12 companies using false names and invoices to claim he was selling millions of pounds worth of designer garments.

Once he realised he was under scrutiny, he produced fake invoices, sales orders and other documents shortly before each meeting with HMRC and asked local accountancy firms to sit in on the visits for an air of legitimacy. When arrested, he told Customs officers that he held no business records but details were discovered on his computer by forensic investigators, who also uncovered financial transactions between the retail and wholesale companies he controlled. Further evidence was gathered by interviewing witnesses in the UK and America. He was jailed for five years and has been banned from operating as a company director for seven years.

However, the other man, a celebrity photographer, was spared a custodial sentence after the Court heard he had been struggling to make ends meet as a wedding photographer while caring for his teenage daughter. He also submitted a forged bank statement and two invoices in a bid to fool the authorities. Forensic accountants are rarely fooled, having wide-ranging experience in the tricks that would-be criminals get up to.

Author: Roger Isaacs, 16 May 2016

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