An accountant from Emerson Park spent over 20 years living a life of luxury whilst helping to steal over £16 million in a tax fraud.
Stewart Collins was awarded six years’ imprisonment after helping two Essex businessmen, Costas Sophocleous and Philip Foster, to steal £16,637,816 in VAT fraud in order to fund an extraordinary collection of mansions and nightclubs.
Mr Collins worked with accountancy firm Paul Da Costa (trading as Kardells Ltd) in Loughton. He helped the two businessmen steal millions of pounds by claiming they were involved in new build construction regardless of the fact that neither man had ever carried out such a construction.
New build constructions are zero-rated for VAT purposes but developers may reclaim VAT on expenses incurred.
Sophocleous and Foster were partners in construction company Eastway.
Sophocleous was also a chairman for Leyton Football Club and had used some of the stolen cash to build a bar next to the football ground.
The scam started in 1996 when a VAT rebate of £4,520 was claimed for the make-believe houses. Ten years later over £200,000 was being claimed for just one month’s worth of expenses but things fell apart when, during a VAT inspection, Sophocleous and Foster could not give simple facts such as the location or number of houses.
HM Revenue and Customs launched an investigation named Operation Guess and charged Collins and Foster with four counts of cheating the public revenue and Sophocleous with five.
Although Collins pleaded not-guilty, he was found guilty at Isleworth Crown Court in November and was sentenced on January 28th to six years in prison. Foster was jailed for five years and six months and Sophocleous was awarded with a sentence for eight years and three months.
Assistant Director of Criminal Investigation for HMRC, Clive Cottrell, issued the following statement:-
“As well as living the high-life and buying expensive houses, some of the proceeds from this crime were used to build the E10 bar and cabaret club which is adjacent to Leyton FC, the club chaired by Costas Sophocleous.
VAT is not a victimless crime and we take a serious view of people robbing the public purse. Our investigators work tirelessly to pursue those who commit such fraud and these sentences will serve as a deterrent to anyone considering committing tax fraud.”
Mr Sophocleous’ wife and son were cleared of any involvement in related money laundering offences.
Upon sentencing, His Honour Judge Edmonds told Collins:-
“It’s an aggravating factor that you used your professional status as a chartered accountant to give cover to this fraud.”
Perhaps this will act as a deterrent to anyone thinking of cheating the public revenue.
A confiscation hearing is set for 26th March 2010 in order to attempt to claw back some of the stolen rebates. None of the money has been recovered so far.