Edmund Burge and John Keal have successfully prosecuted two businessmen and an employee for their roles in a £7m tax fraud. On 21st July 2016 Victor Shearer and Christopher Azzopardi were both unanimously convicted at Maidstone Crown Court of three counts of Conspiracy to Cheat the Public Revenue, after a trial that lasted six weeks. Shearer was also convicted of laundering his £1.2m share of the proceeds of the frauds. A third defendant, Aquil Ahmed, had pleaded guilty to his role in the fraud on the first day of the trial.
Ahmed, an accountant, operated a series of companies that offered a complete or ‘umbrella’ pay-roll service to his clients, who were mostly labour supply companies or recruitment agencies. Azzopardi was Ahmed’s assistant. Together they operated a sophisticated web of UK-registered companies and bank accounts through which they invoiced their clients for their workers wages, income taxes and VAT, but failed to pay those taxes over to HMRC as required. Between 2010 and 2012 Ahmed’s pay-roll companies fraudulently witheld £7m in PAYE, National Insurance contributions, Construction Industry Scheme deductions and VAT. That money was laundered through a series of companies set up for the purpose in Gibraltar and Belize, and from there was transferred to bank accounts held in Jersey, Guernsey, Spain, Switzerland, Turkey, USA, South Africa, Dubai and Chile. Shearer was the sole director of the City-based company Leaner Logistics, supplying temporary and casual labour to the construction industry and which turned over £10m p/a. He lent his company to the fraud by acting as a client of Ahmed’s pay-roll service, and in return received a £1.2 million share of the unpaid taxes over its two-year operation. The rest of the proceeds were shared between Mr Ahmed, his business partner, and the directors of his other client companies who had lent themselves to the fraud.
The scale and complexity of the case meant that it took HMRC nearly two years to investigate. It involved companies and bank accounts across the world, and generated over 30,000 pages of served evidence. After five weeks of evidence the jury took 3 days unanimously to convict both Shearer and Azzopardi on all charges. Sentencing for all three defendants will take place on 5th August 2016.