Prison Sentence for £22 million fraud against the taxpayer

Seven construction company connected insiders have been sentenced for their key role in a £22 million fraud against the taxpayer.

Daniel Newton, 38,  Philip Bailey, 36, Sean Dean, 41, Lee Hudson, 56, Sarah Gillard, 41, Bradley Mortimer, 39, and Kevin Ratcliffe, 43, have been sentenced to nine years and four months imprisonment, six years and three months imprisonment, seven years imprisonment, five years imprisonment, two years imprisonment suspended, three years and six months imprisonment, and 27 months imprisonment, respectively for cheating the public revenue, money laundering related offences, acquiring criminal property and organised criminal gang activities.

The Crown Prosecution Service worked closely with Kent Police and HMRC to build a case for trial that showed that the defendants were involved in the setting up of a building construction core company which invoiced customer companies for supply of labour which included VAT elements on these bills.

The customer companies would pay these invoices but the construction company would not pay the VAT and Construction Industry Scheme contributions to the HMRC, part of His Majesty’s Treasury. It is estimated that there was a loss to the Government and taxpayer of £22 million.

The unpaid VAT and scheme contributions were diverted to the bank accounts of the defendants who were beneficiaries of these fraudulent actions.

The beneficiaries included the lead conspirators Philip Bailey, Daniel Newton, and Sean Dean who were responsible for establishing, maintaining, and developing these crimes. Kevin Ratcliffe was a customer company director who received ‘kickbacks’ in exchange for providing their business to the core company. Lee Hudson was an office worker who was conducting the day-to-day business which enabled these offences. Sarah Gillard and Bradley Mortimer functioned as cash couriers for money laundering for these illicit activities.

Julius Capon of the Crown Prosecution Service said:

“These criminals stole £22 million from the taxpayer. Fake payroll companies were created and operated by Bailey, Newton, Hudson, and Dean.

“Construction companies would permit these payroll companies to make VAT and Construction Industry Scheme (CIS) contributions to HMRC on behalf of their sub-contractors.

“Instead of the VAT and CIS contributions being paid to HMRC, the defendants pocketed the monies themselves.

“The defendant Ratcliffe owned a construction firm which received cash ‘kickbacks’ for assisting in this illegal enterprise of cheating the revenue. The defendants Gillard (partner of Philip Bailey) and Mortimer laundered the proceeds through their bank accounts.

“This is money that is needed to help support our hard-pressed public services.

“The CPS has commenced proceeds of crime proceedings against the defendants to claw back the money they made from this illegal scheme.”

Ian Hackett, Operational Lead, in HMRC’s Fraud Investigation Service, said:

“We have worked closely with Kent Police to dismantle this sophisticated and complex fraud.

“The tenacity and expertise of the investigators involved in this joint investigation has protected millions of pounds of taxpayers’ money, which is needed to fund our public services.

“We encourage anyone with information about any type of tax fraud to report it to HMRC. ”

Our specialist prosecutors will continue to work closely with investigators such as HMRC to prosecute cases of public sector fraud and bring perpetrators to justice.

Source: Crown Prosecution Service