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August 2023 Tax Investigation Round Up

August's round up of the latest tax investigation news and cases:

  • Trio found responsible for £1m bank fraud
  • Scottish businessman pleads guilty to £725k VAT fraud
  • Builder jailed for invoice fraud

Trio found responsible for £1m bank fraud

Cebrail and Munbe Poltat from Enfield were responsible for obtaining over 40 fraudulent bank loan applications, totaling to a loss of around £1m.

The couple worked with Ezzu Ahmet through a mortgage finance company called Bee Finance. Here they acted as directors until 15 March 2018. Through the months of May 2018 and August 2019 they used fake pay slips to obtain fraudulent bank loans.

A tax investigation took place by the dedicated card and payment crime unit (DCPCU) of the Met Police and City of London Police. They discovered 42 fraudulent loan applications, totaling to a loss of £1m.

In court, the Polats received a charge of conspiracy to make fraudulent representations. Matthew Wood and Lawrence Taylor, bank staff, were also charged.

In July 2023 the Polats received a sentence of six and seven years, whilst Ahmet was given a suspended sentence of two years.

Detective constable Matthew Cornell, who investigated the case for the DCPCU, commented: ‘These criminals thought they could get away with a large-scale fraud operation, stealing approximately £1m. Fortunately, we were able to identify these individuals and put a stop to their criminal activity, after working closely with the banking and finance industry.

‘This sentencing will warn anyone who believes they can benefit financially from committing fraud, showing that they will be caught and brought to justice.’

Scottish businessman pleads guilty to £725k VAT fraud

Mohammed Ameen Mirza from Glasgow, pleaded guilty at Glasgow Sheriff Court, admitting that he submitted false VAT returns to HMRC following a VAT fraud investigation.

Between December 2011 and April 2014, Mirza submitted that his sales totaled to £5,073,510 for his two Nisa stores in Glasgow, trading as Nisa way Limited. A bookkeeper and an accountant handled his financial affairs.

Following an examination of documents, including till data, the value of sales should have been declared totaling £9,567,167, showing a difference of £4m in sales from the two shops.

Mirza’s accountant was contacted in 2012 by HMRC to notify them that no VAT had been declared recently. They asked for evidence such as business records, invoices, expense receipts, till roles and weekly cash sheets.

On numerous occasions, the deadlines were postponed. With final submissions being made in April 2014. The accountant stated that to his knowledge the returns were accurate and true, claiming that Mizra had agreed with the figures.

HMRC compared sales from Nisa with the quarterly VAT returns, triggering an investigation in 2015 after search warrants were granted. Sales and business records were looked into, revealing that Mirza had knowingly undeclared £4,393,657, with the total amount of VAT due from sales of ‘supermarket products’ being £1,266,965. During this time frame, Mirza declared VAT payable to HMRC for £541,896.

Prosecutor Graham MacDonald stated: ‘Mirza obtained an advantage for £725,059 since it was not paid to HMRC by him following the submission of erroneous returns in April 2014. The sum remains unpaid, which represents a material benefit to Mirza.

‘It is apparent that the VAT returns submitted were false as, on average, 46.4% of the sales data was not included. This is a result of the reckless approach taken by Mirza to the management of his business records during this time.

Builder jailed for invoice fraud

House builder Allan Livesey, from the Lake District, was jailed for three years after defrauding a finance company out of £295,000 by altering invoices and bank statements.

He convinced finance companies to loan him funds to purchase land to build on. His promise to them was that they would receive half the profit once the houses had sold.

Between June 2018 and September 2019, Livesey falsely made invoices to obtain £295,000 for his personal financial gain. He had approached a finance company for a £1.9m loan to purchase land to build on in Lancashire. This deal was agreed upon the basis that they would receive half the profit once the properties had sold. They had also come to an arrangement that they would pay Livesey £2,000 a month site management fee.

During September 2018, building started. Livesey received invoices from the builder, this was then forwarded to the finance company to release money. However it appeared that Livesey had been fabricating invoices and amending genuine ones in which he presented to the finance company.

He also as apart of his plan, produced false bank statements showing that money had been transferred to the contractor when in fact it had gone to his account.

On 2 August 2023, he was sentenced to three years and one month in prison at Carlisle Crown Court. He also can not be a director of a company for ten years.

Detective constable Claire Keyes, Cumbria Police, said: ‘Livesey amended invoices from contractors for his financial gain. He had an agreement which he signed with the finance company around the loan they provided to him and they trusted him further giving him additional work to monitor other sites.

‘Livesey was aware of what he was doing and defrauded the finance company from very early on in his working relationship with them. I hope today’s sentencing acts as a warning to others considering committing tax fraud.’

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