Directors planned £20m tax fraud at secret meetings

A network of corrupt company directors has been jailed for more than 70 years after they were caught planning an elaborate multi-million-pound tax fraud during clandestine meetings.

The company at the heart of the fraud, Winnington Networks Ltd (WNL), deliberately understated how much VAT was owed to HM Revenue and Customs (HMRC) between 2011 and 2014.

Key evidence was secured when WNL’s Financial Director, Neil Pursell, 60, and key players, were caught conspiring at two hotel meetings held in Manchester and Birmingham in late 2013.

At each meeting, the men openly discussed the fraud; the mechanics and how they could just “invent the numbers” to falsely offset their output VAT claims.

Three earlier trials have already resulted in prison sentences of more than 62 years and Director disqualifications of more than 100 years.

The fraud, which was described by trial Judge Dafna Spiro as “complex and highly sophisticated” saw WNL generating VAT by creating price drops on metals and electrical items they sold via a contrived chain of business transactions outside the UK.

After adding VAT back on to items and selling them at competitive rates to real customers in the UK, Winnington set about offsetting the VAT they had created.

They did this by falsely claiming they had sold VOIP (Voice Over Internet Protocol or telecommunications/internet airtime) to UK suppliers.

Richard Las, Director of HMRC’s Fraud Investigation Service, said:

“This incredibly complex fraud was dismantled thanks to the tenacity, skill and dedication of our criminal investigators. I hope this sends a clear message to anyone involved in tax fraud that regardless of how complex it may be, we have the skills, resources and the determination to catch you and to bring you to justice.

“The scale of the sentences and the significant director disqualifications show how seriously the courts have treated this sustained and sophisticated attack on the UK tax system.

“Tax fraud is not a victimless crime. It steals money that funds the public services we all rely on and I’d urge anyone with information about any type of tax fraud or money laundering to report it to HMRC on GOV.UK.”

The vast majority of VOIP was fake, but WNL and the co-conspirators recruited people who owned VAT-registered businesses to issue fake documents. In return they were handed a share of the profits of the fraud.

They created multiple fictitious deal chains to make it look genuine and even created two fake offshore banking platforms, said to be based in the Seychelles and Canada, in a bid to produce a convincing set of financial records.

A nationwide HMRC operation in March 2014, led to the arrest of 15 people, searches of 36 premises (including a property in Cyprus) and the winding up of three companies.

The huge investigation ultimately led to four trials at Southwark Crown Court and the conviction of 20 people.

Alexander White, Specialist Prosecutor for the Crown Prosecution Service, said:

“Kashaf Bashir, William Lindfield, Assim Rather, Vishal Chudasama,  Adeel Karamat Malik,  Beverley Thompson, and Sarah Jane Peploe were sentenced for playing important roles in stealing and laundering £20 million from the UK taxpayer.

“Together with the other thirteen convicted defendants, they helped operate a complex and sophisticated fake system of offsetting VAT payments to HMRC, money which was meant for public services but was instead stolen for their own selfish purposes.

 “The CPS has commenced proceeds of crime proceedings against all of these defendants to claw back this illegally obtained money.”

All 20 people were convicted of or admitted either conspiracy to cheat the public revenue or money laundering offences.

Notes to Editors