TaxCorporate TaxFour jailed in £100m tax fraud film scam

Four jailed in £100m tax fraud film scam

Four men have been jailed after HMRC rumbled a £100m tax fraud film scam

Four jailed in £100m tax fraud film scam

FOUR MEN who falsely claimed to have invested £275m in film projects and used offshore companies to cover their tracks have been jailed for a total of 27 years, after being exposed by HMRC.

The scheme was created by accountant Keith Hayley and London-based financial advisers Robert Bevan and Anthony Charles Savill, and was disguised as a film development venture marketed under the name of Little Wing Films.

The founders boasted that for every £100,000 invested, higher rate taxpayers would get £130,000 in tax repayments from HMRC.

Offshore scam

Little Wing Films found more than 275 investors – including football players, investment bankers and pop stars – who between them deposited more than £76m in the scheme in the belief that they were helping the British film industry, while legitimately reducing their tax bill.

Norman Leighton, an accountant and corporate services provider based in Monaco, helped the trio to create the pretence that more than £250m was being spent on pre-production and development activity, and creating film packages in Monaco.

In an attempt to hide their fraud they established several offshore companies registered in the British Virgin Islands that supposedly operated in Monaco, Geneva and the Channel Islands. These companies were in-turn fronted by family friends in the Philippines and Kolkata.

However, an HMRC investigation discovered that these packages had in fact cost only £4m and had been created in Little Wing Films’ London offices.

Overall, the gang falsified expenses of more than £275m to increase the scheme’s financial losses, which enabled investors to collectively claim around £100m in tax repayments.

The four men were jailed for a total of 27 years, after they were found guilty of Cheating the Public Revenue at Birmingham Crown Court. HMRC will also now begin to recover these repayments from the investors.

‘Paying the price behind bars’

Simon York, Director of HMRC’s Fraud Investigation Service, said:

“This was a complex investigation in which great work by HMRC officers uncovered a web of offshore companies, fake transactions and a series of lies.

“The fraud was a deliberate attempt to steal from the taxpayer, as well as investors who now face hefty tax bills. These fraudsters were already wealthy individuals who thought they could get away with it – now they are paying the price behind bars.”

HMRC has had recent success with film investment schemes. In April, the government department won its long-running legal battle with tax avoidance scheme Eclipse 35, potentially costing its high-value clients thousands in legal fees.

Naheed Hussain of the Specialist Fraud Division at the CPS said: “These men used a scheme designed to boost the British economy and stole money from the public purse.” The CPS will begin to recover the criminal assets from the case.

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