Fisheries boss defrauded public purse of £500K

Invoices were fabricated over course of six years

A fisheries boss fabricated invoices to scam “astronomical” sums from the taxman and eventually defrauded the public purse of almost £500,000.

John Fleming, boss of Anstruther-based ICS Fisheries Ltd, ran the scheme over the course of six years that saw him “completely fabricate” invoices from a haulage company – allowing him to reclaim VAT on expenses his business had never actually incurred.

As a result he pocketed £489,341.48, but when confronted Fleming denied the “unrealistic” claims were a fraud and insisted they were genuine.

Depute fiscal Eilidh Robertson told Dundee Sheriff Court: “The business owned by the accused is involved in the sale of fish, which is zero rated for VAT.

“As a result, the accused is lawfully entitled to claim back any VAT incurred by him in the expenses involved in the sale of this fish.

“The accused would submit invoices for expenditure incurred to his accountant who would then prepare a VAT return on his behalf and submit this to HMRC.

“The accused told his accountant that he was paying these invoices in cash hence there was no evidence from his business bank account which would either prove or disprove that the invoices were being paid or that the transactions contained within were legitimate.

“As a result of the ever increasing level of VAT repayments being requested by ICS, a compliance visit was undertaken by HMRC in December 2012.

“The officer noted a high level of haulage costs for the business being attributed to one particular supplier, G and J Wilson.

“Further inquiries were carried out and these uncovered a substantial discrepancy in the input tax being claimed by ICS versus the output tax being declared by G and J Wilson.

“There was no evidence of the high value taxable sales invoices for which ICS Fisheries had reclaimed input tax, nor was there any evidence of large scale suppression of sales by G and J Wilson.

“When interviewed by police he claimed the invoices were legitimate.

“One particular transaction was put to him where he had claimed input VAT of £53,000 for haulage costs against a purchase of £80,000 of fish but he insisted the transaction was genuine and that he had paid this in cash.

“All invoices showed exorbitant levels of haulage costs being claimed by him against his alleged purchase of huge quantities of fish.

“The invoices were shown to G and J Wilson who confirmed that they had been completely fabricated, with the style being used for the invoices being different to the invoices used by them, with different formatting and fonts.

“The accused’s computer was later analysed and it was uncovered that these false invoices had in fact been created by the accused on it before he had submitted the them on to his accountants and induced them to make the false claim on his behalf.”

Fleming, 59, of Balmullo, Fife, pleaded guilty to a charge under the Value Added Tax Act committed between May 2007 and July 2013.

Sheriff Alastair Carmichael deferred sentence until next month for reports.

John Fleming pocketed £489,341.