‘We are delighted that … we are able to make these two men pay for their cynical action’, says HMRC
A second tax adviser has been jailed for cheating the revenue by submitting tax relief claims that falsely stated the value of shares gifted to charities.
Roy Faichney, managing director of Vantis Tax Ltd, had a gentleman’s agreement with his colleague David Perrin to share a £4.5m profit from a ‘fraudulent tax avoidance scheme’ sold to wealthy individuals between 2005 and 2006, HMRC said. There is no suggestion that clients were aware of the fraud. Vantis collapsed in 2010.
HMRC guidance warns that tax avoidance arrangements which may involve dishonesty or criminality ‘will be identified and reviewed for potential criminal investigation’.
Faichney, aged 54, of Barnhill, Pinner, Greater London, was jailed for four years and disqualified from acting as a director for ten years. He had used a network of finance professionals to advise more than 600 wealthy clients to buy shares worth a few pence each in four new companies, HMRC said.
‘He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares simply to inflate their price. The share owners then donated 329m shares to various unsuspecting registered charities and tried to claim £70m tax relief on a total of £213m of income and company profits. This was based on the shares being worth up to £1 each, when in fact they were still worth the pennies they were originally bought for.’
Perrin, aged 46, of Leagrave, Luton, Bedfordshire, was jailed for 18 months earlier this year for his part in the fraud. Jurors were unable to reach a decision when Faichney was tried jointly with Perrin in January.
The scheme was so popular, HMRC said, that Vantis employees performed a ‘smug celebratory song’ at their annual conference to the tune of ‘I will survive’.
Judge Henry Blacksell, at Blackfriars Crown Court, told Faichney: ‘If you ever had a moral compass you lost it or buried it under the property purchases, furnishings, holidays and cruises. The general public are sick and tired of men such as you and schemes such as this. This is high net worth fiddling. The general public should applaud the dedication and commitment shown by HMRC in pursuing all aspects of this case. They have been well served.’
‘Cynical action’
Jenny Crutchfield, of HMRC Criminal Investigations, said: ‘Faichney thought he could attack and defraud the tax system by using his knowledge as a tax adviser. Together with Perrin, not only did he attempt to cheat taxpayers out of millions of pounds, but callously abused a tax relief designed to benefit charities by arranging the gifting of 329m virtually worthless shares. We are delighted that after an extensive investigation we are able to make these two men pay for their cynical action.’
The solicitor general referred Perrin’s 18 months sentence to the Court of Appeal, HMRC revealed. ‘On 5 July 2012 the Court of Appeal found that Perrin’s sentence had been unduly lenient, and stated that the starting point for a case such as this, before mitigating factors are taken into account and involving prejudice to the public revenue on a very considerable scale, should be seven years’ imprisonment. However, due to Mr Perrin’s health, the Court of Appeal did not alter the 18 month sentence he received.’
‘We are delighted that … we are able to make these two men pay for their cynical action’, says HMRC
A second tax adviser has been jailed for cheating the revenue by submitting tax relief claims that falsely stated the value of shares gifted to charities.
Roy Faichney, managing director of Vantis Tax Ltd, had a gentleman’s agreement with his colleague David Perrin to share a £4.5m profit from a ‘fraudulent tax avoidance scheme’ sold to wealthy individuals between 2005 and 2006, HMRC said. There is no suggestion that clients were aware of the fraud. Vantis collapsed in 2010.
HMRC guidance warns that tax avoidance arrangements which may involve dishonesty or criminality ‘will be identified and reviewed for potential criminal investigation’.
Faichney, aged 54, of Barnhill, Pinner, Greater London, was jailed for four years and disqualified from acting as a director for ten years. He had used a network of finance professionals to advise more than 600 wealthy clients to buy shares worth a few pence each in four new companies, HMRC said.
‘He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares simply to inflate their price. The share owners then donated 329m shares to various unsuspecting registered charities and tried to claim £70m tax relief on a total of £213m of income and company profits. This was based on the shares being worth up to £1 each, when in fact they were still worth the pennies they were originally bought for.’
Perrin, aged 46, of Leagrave, Luton, Bedfordshire, was jailed for 18 months earlier this year for his part in the fraud. Jurors were unable to reach a decision when Faichney was tried jointly with Perrin in January.
The scheme was so popular, HMRC said, that Vantis employees performed a ‘smug celebratory song’ at their annual conference to the tune of ‘I will survive’.
Judge Henry Blacksell, at Blackfriars Crown Court, told Faichney: ‘If you ever had a moral compass you lost it or buried it under the property purchases, furnishings, holidays and cruises. The general public are sick and tired of men such as you and schemes such as this. This is high net worth fiddling. The general public should applaud the dedication and commitment shown by HMRC in pursuing all aspects of this case. They have been well served.’
‘Cynical action’
Jenny Crutchfield, of HMRC Criminal Investigations, said: ‘Faichney thought he could attack and defraud the tax system by using his knowledge as a tax adviser. Together with Perrin, not only did he attempt to cheat taxpayers out of millions of pounds, but callously abused a tax relief designed to benefit charities by arranging the gifting of 329m virtually worthless shares. We are delighted that after an extensive investigation we are able to make these two men pay for their cynical action.’
The solicitor general referred Perrin’s 18 months sentence to the Court of Appeal, HMRC revealed. ‘On 5 July 2012 the Court of Appeal found that Perrin’s sentence had been unduly lenient, and stated that the starting point for a case such as this, before mitigating factors are taken into account and involving prejudice to the public revenue on a very considerable scale, should be seven years’ imprisonment. However, due to Mr Perrin’s health, the Court of Appeal did not alter the 18 month sentence he received.’
