Richard Driscoll, a film maker who launched Britain's first independent studios since the 1960s, has been jailed for three years for a £1.5m VAT fraud.
Driscoll was the producer of the first modern British film to be shot in 3D, Eldorado, which featured a number of well-known British and Hollywood stars and was narrated by Peter O'Toole. He was also an actor and had played a walk-on part in TV comedy series It Ain't Half Hot Mum.
Southwark Crown Court heard that Driscoll claimed he had been offered £35m by financial advisor Keith Howell to make a string of horror films. Howell, who died before he could be charged in the case, allegedly instructed the film producer to charge the same fees as Pinewood Studios despite him quoting less.
The court heard that while Howell and his companies were making £14,000 a month out of the scam Driscoll was paid just £65 week.
Eldorado had a purported production and promotion budget of more than £9m but actually cost under £1m. An HMRC investigation found Driscoll had falsified invoices for the costs of film making in order to reclaim VAT that he was not entitled to, and set up a number of associated companies that were used solely to commit the crime.
Amongst the bogus or inflated invoices was one showing that David Carradine, the star of the 1970s TV series Kung Fu, was paid more than £400,000 for 13 days' filming, even though he had died two weeks earlier.
Darryl Hannah was purportedly paid £575,000 for seven days' work in Cornwall, despite not leaving the US, while another fake invoice showed comedy actor Rik Mayall received £44,350 for four days' filming when his fee was actually £6,000 for two days.
Driscoll was convicted of conspiring to claim £1.5m of VAT refunds in connection with Eldorado and two other horror films He was found not guilty of conspiring to claim more than £2m in film tax credit subsidies for Eldorado.
His co-defendants, solicitor Terry Marsh, accounts manager Richard Pearce, and casting agency director Darren Moore, were all cleared of the film tax credit and VAT conspiracies.
The judge acknowledged that Driscoll had not benefited from the scheme, which was Howell's brainchild, but said that he had used his film making expertise to create the false paper trail. He described Driscoll's current living conditions and lack of income as 'rock-bottom'.
Paul Barton, assistant director of criminal investigation, HMRC, said: 'HMRC investigators unravelled a complex and organised VAT fraud that Driscoll knew was against the law. As a result he has now lost his liberty and has a criminal record.'
