An accountant has been jailed for nine years, along with two financial advisors who each also received nine year sentences, for their part in a £100m fraud based on a tax avoidance scheme which sought to exploit film reliefs
Keith Hayley, an accountant, along with London-based financial advisers Robert Bevan and Anthony Savill, created the scheme which was disguised as a film development venture marketed under the name of Little Wing Films.
More than 275 investors - including football players, investment bankers and pop stars - between them deposited more than £76m. The men told investors that for every £100,000 invested, higher rate taxpayers would get £130,000 in tax repayments from HMRC.
Norman Leighton, an accountant and corporate services provider based in Monaco, helped the trio to create the pretence that more than £250m was being spent on pre-production and development activity, and creating film packages in Monaco. However, an HMRC investigation discovered that these packages had in fact cost only £4m and had been created in Little Wing Films’ London offices.
Hayley, Bevan and Savill, together with Leighton, falsified paperwork to mislead HMRC. They established several offshore companies registered in the British Virgin Islands that supposedly operated in Monaco, Geneva and the Channel Islands. These companies were in turn fronted by family friends in the Philippines and Kolkata.
However, each of these companies did little more than pass investor funds through their bank accounts, from one to another and back again, sometimes several times, in order to give the appearance that more money had been invested than was in fact the case, inflating the scheme’s losses.
Overall, the gang falsified expenses of more than £275m to increase the scheme’s financial losses, which enabled investors to collectively claim around £100m in tax repayments.
The four men were found guilty of cheating the public revenue at Birmingham Crown Court. As well as the nine year jail terms for Hayley, Bevan and Savill, Leighton was given a two year suspended sentence.
Simon York, director of HMRC’s fraud investigation service, said: ‘This was a complex investigation in which great work by HMRC officers uncovered a web of offshore companies, fake transactions and a series of lies.
‘The fraud was a deliberate attempt to steal from the taxpayer, as well as investors who now face hefty tax bills. These fraudsters were already wealthy individuals who thought they could get away with it – now they are paying the price behind bars.’
HMRC says it will now begin to recover repayments from the investors.
