Man jailed for using £180,000 tax fraud to pay off confiscation order
A man who carried out a £180,000 VAT tax fraud to repay money he had previously made as a forger has been jailed for more than two years.
John Farrell, 61, used fake passports and driving licences to set up bogus companies and bank accounts to fraudulently claim VAT repayments, an HM Revenue and Customs (HMRC) investigation found.
He laundered £75,000 of the money through a bogus Cypriot account before using it to pay most of a £96,000 confiscation order imposed after he was jailed for five years and eight months for running a counterfeiting operation at a factory in East Kilbride producing fake banknotes.
Farrell, from Thorntonhall, South Lanarkshire, was jailed for 27 months when he appeared at Glasgow Sheriff Court on Monday after pleading guilty to VAT fraud and money laundering at a previous appearance in January, HMRC said.
HMRC began looking into the bogus companies after concerns were raised about the VAT claims and an officer visited Farrell, who was using the name Andrew Strachan.
However, Farrell’s false identity was exposed when the “eagle-eyed” HMRC officer recognised him from a newspaper article about the forgery confiscation order.
Cheryl Burr, assistant director, fraud investigation service, HMRC, said: “This was a shocking ploy by Farrell to pocket public money. His actions were one of pure greed, so he could lead a comfortable lifestyle in a house worth more than £1 million.
“He then had the cheek to use the proceeds of this fraud to repay a confiscation order imposed on him. Rather than repay the public purse, he chose to steal from it.
“The VAT he illegally reclaimed could have paid for the equivalent of seven new nurses in Scotland for a year.
“HMRC will continue to pursue criminals who attack the tax system and we ask anyone with information about suspected VAT fraud to report it to HMRC online or call our Fraud Hotline on 0800 788 887.”
HMRC officers searched Farrell’s home on June 5, 2013 and found more than 24 mobiles, laptops, memory cards and false passports which they seized.
A bag containing a laptop, paperwork relating to the bogus companies, prepaid credit cards and phone sim cards was found hidden in the eaves of the £1 million mansion, while a false driving licence in the name of “Andrew Strachan” containing Farrell’s picture was discovered on an electronic device recovered.
Farrell was arrested and charged after interview on the same day.
HMRC said he stole £180,591.20 by claiming VAT repayments for several bogus companies between 2011 and 2012.
He laundered £75,000 of the stolen money through the bogus Cypriot company account before using it to pay part of the confiscation order.
Authorities are also seeking a Serious Crime Prevention Order (SCPO) against Farrell for when he leaves prison.
If successful, it would be the first to be imposed on the back of a HMRC conviction in Scotland, the organisation said.
Michael Mullen, 41, an associate of Farrell’s, pleaded guilty to owning or controlling registered addresses for false businesses to facilitate the commission of VAT fraud in a hearing at Glasgow Sheriff Court last month.
Mullen, from Cambuslang, South Lanarkshire, was sentenced to a Community Payback Order and a Restriction of Liberty Order at the same court on Monday.