Payroll fraud mastermind is jailed for conspiracy
AGLOBE-TROTTING tax consultant fled the UK before he could be arrested for masterminding a conspiracy to pocket £6.9m from construction workers’ pay packets.
David Hughes left the country in September 2011, travelling to Chile and Dubai before settling in northern Cyprus, but he was eventually arrested at Heathrow Airport in January.
Sentencing him at Southwark Crown Court on Thursday, Recorder David Etherington QC said Hughes had committed a “deliberate, calculated fraud that was brazen and bold from the outset”.
Hughes, originally from Llandudno, worked for the Inland Revenue in the Colwyn Bay tax office in the 1980s before setting up as a tax consultant in Kent.
Prosecutors said he led a conspiracy involving fraudulent payroll schemes, using UK and offshore companies and bank accounts to pocket £6.9m in taxes paid by clients and deducted from workers’ wages. The money, which should have been paid to HM Revenue & Customs (HMRC), was split between Hughes and his co-conspirators.
Hughes set up, and with his co-conspirator Aquil Ahmed, operated more than 10 companies in the UK, Belize and Gibraltar to carry out the fraud, laundering the money through various bank accounts.
They were co-directors of the Keepers accountancy and taxation practices based in Rochester, Kent. The pair employed Christopher Azzopardi to operate payroll services for clients through their various Keepers companies. They were supposedly calculating wages and paying any tax due through the PAYE and Construction Industry Scheme systems. Clients were charged VAT on these services, but nothing was paid to HMRC.
They ran the scam payroll schemes for Victor Shearer’s construction services company Leaner Logistics Limited and he then introduced other clients to the fraudulent payroll scam. Workers believed their taxes were being paid to HMRC, but instead they were lining the defendants’ pockets.
Hughes, Ahmed and Shearer channelled money through Gibraltar, the Channel Islands, the United Arab Emirates, USA, Turkey and various property transactions.
Hughes used some of the money to start a new life abroad. Shearer laundered £1.2m through a Gibraltar bank account and spent money on property and high living. Ahmed owned a Bentley, bought properties abroad and took multiple foreign holidays.
Hughes left the UK in September 2011, travelling to Chile and Dubai, before setting up home in Cyprus, which does not have an extradition treaty with the UK.
He was arrested by HMRC investigators at Heathrow Airport in January this year when he arrived on a flight from Istanbul, Turkey.
David Michael Hughes, known as Mike Hughes, 52, previously of Spendiff, Rochester, denied three counts of conspiracy to cheat the public revenue, two counts of false accounting and furnishing false information and one count of money laundering.
But he was found guilty by a jury following a four-week trial and was jailed for nine and a half years.
Ahmed admitted conspiracy to cheat the public revenue and was jailed for seven years and eight months in October 2016. He was disqualified from being a company director for 10 years.
Shearer was convicted of conspiracy to cheat the public revenue and money laundering and was jailed for seven years and six months in October 2016. He was also disqualified from being a company director for 10 years.
Azzopardi was convicted of conspiracy to cheat the public and jailed for four years in October 2016.
HMRC will seek to recover the money Hughes pocketed by pursuing confiscation, having already secured confiscation orders totalling £3.5m from Ahmed and Shearer in January 2018.