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Five jailed for £100m tax scheme scam exploiting celebrities

Five jailed for £100m tax scheme scam exploiting celebrities

Five men have been jailed for a £100 million tax scheme which conned hundreds of celebrities.

The scheme, which is believed to be the biggest tax fraud in UK history, used ‘ethical’ environmental projects to convince investors they could reduce their tax bills by investing in reforesting projects in Brazil and China.

A total of 730 investors signed up to the scheme, including hundreds of celebrities, induced by the offer of an immediate large return - a £20,000 investment would result in a successful claim for £32,000 in tax relief.

The scheme was led by 55-year old Michael Richards, an environmental scientist and Cambridge graduate.

Jonathan Anwl, 44, the son of a retired Crown Court judge, was another key figure in the scheme.

The defendants set up a number companies around the world, which were marketed on the basis they were independent of each other and acting in their own interests.

However, prosecutors found they were actually under the control of the defendants, who were cycling cash between them to create an illusion of lending.

Richards is said to have made £7.4 million from the fraud. He is reported to have spent £32,000 on an engagement ring, £1.7 million on property and also gave a £20,000 donation to Cambridge University to have a plaque in memory of his father erected at Gonville & Caius College.

Meanwhile Anwyl, a former Eton student, made £1.6 million from the scam and used £788,000 to pay off the mortgage on a property on Australian property he owned with his wife.

The offshore structures were set up by former president of the Rotary Club in London, Rodney Whiston-Dew, 67, who worked as a solicitor.

Meanwhile former music industry executive and business consultant Eudoros Demetriou, 78, used his contacts to drum up interest in the scheme among celebrities.

Entrepreneur Robert Gold, 49, was described as second in command on the scheme and made £5.3 million.

Richards and Gold were both jailed for 11 years and Whiston-Dew received a 10-year sentence. Demetriou was sentenced for six years and Anwyl was jailed for five-and-a-half years.

The convictions mark the end of 10 year investigation into the five men. 

During a nine month trial Southwark Crown Court heard how much of the structure was deliberately incorporated in offshore jurisdictions, such as the British Virgin Islands and the Island of Nevis, often through the agency of Panama-based Mossack Fonseca, with the intention of ensuring its secrecy.

According to the Crown Prosecution Service (CPS), the scheme attempted to deceive HMRC into believing that the overall project was much larger than it was, and into granting false tax relief. 

The schemes generated apparent 'losses' of £269.8 million, which they said had been spent on research and development.

This put HMRC at risk of losing approximately £107million in tax as the defendants siphoned off large sums of money. 

The CPS said the defendants lied about the nature of their companies - first to HMRC and professional financial advisors and then to a judge of the First Tier Tax Tribunal.

Alison Saunders, director of public prosecutions, said: ‘This was a major attack on the tax revenue of the UK. This type of criminal activity effectively picks the pocket of every citizen and taxpayer and is rightly pursued by the CPS and our partners with the utmost rigour.

‘The scheme was carefully planned and created by these men who used their reputations to promote it.

She added: ‘The complex nature of the fraud meant that a large international investigation was needed to unpick the financial trail. The CPS worked very closely with HMRC and foreign authorities from an early stage, and over a number of years, to gather compelling evidence.’

The disclosure process in this case involved large volumes of digital material, which comprised approximately seven terabytes of data which equates to around five million electronic documents and files.

Saunders added: 'The current law on disclosure was implemented prior to the digital age, at a time when unused material was in paper form. ‘Disclosure has been a significant issue during this case, causing the first trial to be brought to an end, and the management of unused material was a major challenge for the prosecution throughout.’

‘Despite these challenges and following careful presentation of the evidence to the court, the jury has convicted the defendants and they must now face the consequences of their actions.'

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