An accountant and a company director from Kent, who conspired to defraud HMRC through sham payroll schemes have been ordered to pay back more than £3.5 million within 3 months, or serve longer prison terms and still owe the money.
The pair were jailed in 2016 after cheating HMRC out of £6.9 million in VAT, income tax, National Insurance Contributions and Construction Industry Scheme deductions.
Accountant Aquil Ahmed’s business “Keepers” ran the payroll for Victor Shearer’s construction services company “Leaner Logistics Ltd.”
Shearer introduced other clients to the payroll company and use of the fraudulent scheme. Workers believed in good faith that appropriate taxes were being paid to HMRC, but instead they were funding the fraudsters’ lavish lifestyles.
In the course of his trial, it emerged that Shearer laundered £1.2 million through an offshore bank account and used the money to buy property and fund a high life of ski-holidays and cars.
Ahmed owned a Bentley, bought properties in the UK and abroad and took multiple foreign trips including Dubai and the Monaco Grand Prix.
While the men attempted to disguise their fraud using a network of companies and bank accounts in the UK and offshore, ultimately, HMRC investigators caught up with them and they were jailed in October 2016. Shearer was sentenced to seven years and six months, while Ahmed was handed a term of seven years and eight months.
After confiscation hearings at Maidstone Crown Court both men now face selling their assets to pay back a total of £3.58 million.
Ahmed was ordered to pay back £2.9 million within 3 months, or be jailed for a further 5 years, while Shearer must repay £646,000 within three months, or face another 3 years behind bars.
Nicol Sheppard, Assistant Director of HMRC’s Fraud Investigation Service said:
“We do everything we can to stop criminals profiting from their crimes and to recover the money to fund the public purse.”
“Ahmed and Shearer stole millions of pounds from the UK economy, using numerous UK and offshore companies to hide their fraud. They were driven by greed, abusing systems that are designed to ensure workers are paid correctly and taxes paid to HMRC.
“They are still serving their prison sentences and if they fail to comply with these orders they will spend even more time behind bars – and still owe the money.”
While an extreme example, this story highlights the lengths some unscrupulous payroll providers will go to to line their own pockets.
It is more important than ever for agencies to implement a water-tight Preferred Supplier List, but this is no minor challenge.
If you are a recruiter or end hirer you can minimise your risk by only partnering with payroll firms who are FCSA Accredited Members. Look out for the orange logo!