August 2024 Tax Investigation Round Up

August's round up of the latest tax investigation news and cases:

• Jail time for Kent director's £170k jail fraud
• Father and son jailed for £136k fraud
• Taxi driver's £100k loan fraud

‍

Jail time for Kent director's £170k investment fraud

A company director from Gillingham, Kent, has been sentenced to one year and eight months in prison after defrauding investors of £170,000 to fund his own business following an investigation into his tax affairs.

In October 2020, Kevin Pook persuaded a couple to invest their savings, claiming the funds would be put into a "legitimate company." Instead, he misappropriated the money and fled the country.

Following an investigation by Kent Police, Pook was sentenced at Maidstone Crown Court. The court heard that Pook had invested the stolen funds into his own company, N.E.G Services, where he was the sole director. N.E.G Services, an information technology consultancy registered on Companies House, had only been established in September 2020 and was dissolved in 2022.

The victims realized they had been scammed a year later when the phone numbers they used to contact Pook stopped working. They had intended to invest their money elsewhere but were left with nothing.

Kent Police believed Pook had moved to Portugal, as he remained untraceable until 10 January 2024, when he was arrested upon his arrival at Stanstead Airport.

Mark Newman, the investigating officer at Kent Police, stated, "Kevin Pook claimed he knew nothing about the offences being committed and that he had opened an account on behalf of others who controlled everything that went in and out. Even if that were true, he still played a significant role in an innocent couple losing vast quantities of money, and we were able to prove that he benefited personally."

Newman also noted, "Fortunately, the victims in this case were refunded by their bank, but they were still deeply affected by this crime and the initial concern that they had lost everything. Pook is partly responsible for that and is fully deserving of the custodial sentence he has now received."

He added, "This case sends an important message that even people who carry out their research and are very careful with their money can still become victims of crime. Before investing, always be absolutely certain that the contact details you are using are correct and that your money is going where you intend it to go."

‍

Father and son jailed for £136k fraud

A father and son from Wisbech have been jailed for a £136,000 fraud involving the return of discounted Tefal irons to Argos using forged receipts.

Paul Mathews, 62, and Dean Mathews, 40, devised a scheme where they purchased reconditioned Tefal irons, valued at around £400, at heavily discounted prices, and then returned them to Argos for the full price, accumulating £136,000 in total. Part of the refunds was issued in the form of gift cards.

The duo carried out 528 fraudulent transactions from 2021 until their arrests in February 2024.

Detective Chief Inspector Lee Parish of the City of London Police commented, “This was an elaborate plot with a very simple objective - make as much money as possible. Both men will now serve time in prison for their actions, which should serve as a lesson to those being tempted by illegal get-rich-quick schemes. You will eventually be found out, and we will pursue you until justice is served."

He added, “Retail fraud has a huge impact on a very human level. The impact of this fraud has a human element when you consider that businesses rely on profitability to pay their employees’ salaries, health benefits, and health insurance.”

Argos first raised suspicions after detecting unusual return patterns linked to Paul Mathews. Further investigation, including correlating the timing of returns and matching the men and their vehicles on CCTV, revealed the full scale of their fraud.

Both men were arrested for fraud and money laundering but responded with "no comment" during police interviews. Searches of their homes and vehicles uncovered further evidence, including Tefal irons in Argos carrier bags.

Despite being released on bail, the Mathews continued their fraudulent activities, with the next illegal return occurring within 24 hours of their release. They committed a further 19 offences while on bail, leading to their remand in custody.

The pair were re-arrested in June, and a second search of their properties uncovered bank cards linked to their fraudulent activities.

Both men pleaded guilty to conspiracy to commit fraud and money laundering. Paul Mathews was sentenced to three years in prison, while Dean Mathews received a two-year sentence.

Taxi driver's £100k loan fraud

An Essex taxi and delivery driver has been handed an 11-year bankruptcy restriction after fraudulently claiming loans during the pandemic.

Hafiz Saeed Ahmad, from Ilford, inflated the turnover figures of two businesses to fraudulently obtain a total of £100,000 from the Covid loan scheme, significantly exaggerating his earnings.

When the government introduced generous loans to support businesses during the Covid-19 pandemic, Ahmad took advantage of the opportunity. He applied for two separate bounce back loans for his businesses: Sanwal Deliveries and Distribution, and his taxi company, both based in East London.

Ahmad went bankrupt in February 2024, and an investigation by the official receiver revealed that he had overstated the turnover of both businesses to claim more money than each was entitled to under the scheme's rules.

The investigation found that Ahmad claimed £50,000 for his delivery business in July 2020, the maximum allowed under the scheme. He then applied for a second £50,000 loan for his taxi business in September 2020.

Further inquiries revealed that Ahmad had failed to use the loan money for the economic benefit of either business, violating the scheme’s conditions. The rules of the bounce back loan scheme allowed businesses to claim up to 25% of their 2019 turnover, with a maximum loan of £50,000, and required that the funds be used for the economic benefit of the business.

The official receiver obtained an 11-year bankruptcy restrictions undertaking (BRU) from Ahmad, which he accepted without dispute. He admitted to obtaining the loans by overstating the turnover levels of his businesses and not using the funds for their economic benefit.

This undertaking extends his original bankruptcy restrictions from the standard 12 months to 19 August 2035.

Samantha Crook, deputy official receiver at the Insolvency Service, stated: “Hafiz Ahmad abused taxpayers’ money not once, but twice, taking out two separate loans based on false information, claiming more money than his businesses were entitled to receive. These long-lasting restrictions will help to protect people from financial wrongdoing by limiting Ahmad’s access to credit and making others aware that there are sanctions against him.”

Ahmad had also been a director of another company, Sanwal Business Consultants Limited, which was dissolved in January 2018.

‍