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Crime Doesn’t Pay: Two men jailed for £34m Tax Fraud


£34m Tax Fraud: Business partners, Thomas Scragg and Paul Phillips, have been jailed for 17 and 9 years after laundering money through the construction industry.

Author – Charlotte Lewis Published – 13:00 12 July 2012

 

Receiving one of the longest prison sentences in history for committing tax fraud, Thomas Scragg, 56 from Solihull, West Midlands, has been jailed for a total of 17 years on three counts of tax fraud after he stole millions of Pay-As-You-Earn (PAYE) tax from employees through his company ‘Moya Payroll’.CIS Tax Investigation

Moya Payroll was responsible for managing the wages of staff, paid by construction industry companies, from which Scragg stole over £26m tax between 2002 and 2007. Scragg’s co-defendant, Paul Phillips, 60, from Derbyshire also received a jail sentence of 9 years for his involvement in the construction industry tax fraud.

Also playing a part in the construction industry tax fraud were Brothers Anthony and Carl Johnson, 41 and 49, from Wolverhampton, who have been found guilty of money laundering by the West Midlands Police and are currently awaiting sentencing.

A reporting ban on Scragg’s tax fraud activities has been lifted now that the Johnson brothers have been convicted of laundering Scragg’s stolen taxes.

Investigations by the police and HMRC uncovered hundreds of thousands of pounds that were splashed out on expensive London hotels and local restaurants by the men. The Johnson brothers even thought to protect themselves by adding bullet proof glass to Carl’s home, Proceeds of Crime bought luxury carswhilst Anthony added stables, dog kennels and a cinema room. Expensive cars also donned their driveways, including a Ferrari Spider, Bentley Continental, Porsche Cayenne and Lamborghini Murcielago.

Reports were first made to the West Midlands Police in 2006 when suspicious neighbours heard the brothers say: “Crime does pay”. When the police looked in detail as to where the brothers’ were getting their money from they were led to Thomas Scragg, who was already under tax investigation by HM Revenue and Customs (HMRC); Scragg was paying the Johnson brothers for their ‘protection services’ whilst he continued to carry out his construction industry tax fraud.

Birmingham Crown Court heard how the Johnson brothers were able to fund a lavish lifestyle from the money they received for ‘protecting’ Scragg; paid £2.4m. The Johnson brothers claimed that their money came from Unit 11, their security business, which paid no tax to HMRC.

“This was fraud and money laundering on a massive scale; it deprived the public purse of millions of pounds and Scragg’s audacity is shown by the fact he continued the fraud in various guises even after he knew he was being investigated. Carl and Anthony Johnson flaunted their wealth for the local Wolverhampton community to see – which is what ultimately led to their downfall. They were once heard to joke ‘crime does pay’…they now have plenty of time behind bars to reconsider this option.” Detective Chief Inspector from the West Midlands Police, Shaun Edwards, said.

Also jailed for tax fraud this week is Stephen Ledsham, 49, from Hertfordshire: Receiving 15 months in prison for failing to pay national insurance and tax on over £1m, earned since 1992 from his railway industry planning service provider, Kallbond ltd.Railway Tax Fraud

Ledsham’s £400,000 tax fraud was uncovered by a joint tax investigation by HMRC’s criminal taxes unit and the British Transport Police. Tax fraud was committed by obtaining railway industry contracts through an agency that paid Ledsham through his company, Kallbond Ltd, on which no tax or NI was deducted. Ledsham then failed to notify the agency when he dissolved Kallbond Ltd and continued to receive payments from them. In an attempt to hide the tax fraud Ledsham provided the agency with forged company documents.

Pleading guilty to one count of fraud and two counts of cheating the public revenue at Blackfriars Crown Court on 30 May 2012, the total amount of national insurance, income tax and VAT, plus interest, to be recovered from Ledsham is £401,764.34; Proceedings are also underway to recover the proceeds of crime from Scragg and the Johnson brothers’ tax fraud.

Tax Fraud and VAT Fraud enquiries are serious and should be dealt with by a tax investigations expert.

KinsellaTax staff consist of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers fully trained in all types of HMRC investigations.

Don’t struggle with a Tax Fraud or VAT Fraud enquiry on your own. Get KinsellaTax on your side by calling 0800 471 4546, or you can submit your tax enquiry online.

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