TaxPersonal Tax‘Brazen cheat’ jailed for scam

'Brazen cheat' jailed for scam

An insolvency practitioner who helped a mining industry boss cheat the taxman out of #1.5m was jailed last week.

John Papi, 50, of Richmond, Surrey, was jailed for 18 months after being convicted at Southwark Crown Court of two cheat charges and one of false accounting. The Insolvency Practitioner Association withdrew his licence in 1994.

George Sagar, MD of Low Valley Engineering and Shot Blasting (LVE), received a 200-hour community-service order after the court heard he acted to save jobs.

LVE employed 400 people in Yorkshire working on British Coal contracts.

Its tax bill remained unpaid as money was diverted to fund operating costs due to under-capitalisation, and the business was allowed to go under in a bid to escape the taxman. But in early 1993, LVE became West Riding Technology (WRT) – operating from the same address in the Low Valley Industrial Estate, Barnsley.

Judge Dennis Levy, QC, said the ‘brazen cheat’ involved getting Papi to become the receiver of the first company and move payments from British Coal to WRT, which had risen ‘phoenix-like from its (LVE’s) ashes’.

He said it was ‘brazenly carried out’ when the money should have been dispersed to creditors, such as the taxman.

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