Magistrate and Director both jailed for £1m VAT fraud

A former magistrate and a company director who crudely faked documents in a £1 million VAT fraud linked to the house building trade in Lancashire, were jailed yesterday.

Simon John Price, aged 44, of Gloucester, who had been a magistrate in Lancashire and Gloucestershire, pleaded guilty to 27 charges involving VAT fraud and falsifying documents at Bolton Magistrates Court in September 2012. His accomplice John Neil Smith, aged 45, a building company director from Preston, denied 11 similar charges and was found guilty of 10 at Manchester Crown Court on 3 May 2013.

Both men were arrested by officers from HMRC’s Criminal Taxes Unit in September 2011 in connection with fraudulent VAT claims totalling almost £1 million, submitted by Ice Blue Development Limited between 2008 and 2010.

HM Revenue and Customs spokesman said: “This pair made incredibly crude attempts to falsify invoices and financial guarantees in a circle of fraudulent transactions. It was a complete cut-and-paste regime that unravelled as soon as HMRC officers investigated their business activities. The proceeds from the fraudulent VAT repayments were diverted into their bank accounts in an attempt to stave off their company’s and own domestic debts. The fact that Price was an acting magistrate in the Preston area at the time of the fraud makes it more shocking”.

During HMRC’s searches of business premises in Preston, a huge number of false documents were seized. These include doctored invoices for building services received and faked references/correspondence from banks, solicitors and other institutions. The investigation uncovered letter headings from legitimate businesses that had been manipulated to create false documents.  Examination of their email accounts showed Price and Smith referring to “mickeying” up documents to suggest that Ice Blue was a reputable company and in good financial order to tender for contracts with local housing associations and to apply for bank loans.

The pair were charged with various counts of “Cheating the public revenue, contrary to common law” and “making or supplying articles for use in fraud contrary to Sections 6 and 7 of the Fraud Act 2006”. Smith was sentenced to three and a half years in prison and disqualified from being a company director for 5 years.  Price was sentenced to 40 months in prison and disqualified from being a company director for 6 years.

Lynam Tax Investigation Experts have a vast amount of practical experience in managing serious tax fraud investigations.  If you are worried about a tax investigation we can advise you on the best course of action.  If appropriate, we can help you manage any necessary disclosures.  If you are facing criminal charges we can help you obtain excellent legal assistance, in order to obtain the optimum outcome for you, your business and your family.

*For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997
or Andrew Nutbrown on 07718 778710