March 2024 Tax Investigation Round Up

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

• 70-year old jailed for fraud
• Wholesale director jailed for £200,000 fraud
• Hairdresser falsely claimed £50,000 Bounce Back Loan

70-year old jailed for fraud

A man of 70 has been sentenced to nearly two years in prison after admitting to a series of fraudulent and thieving actions starting in 2017.

Residing in Uxbridge, John Lancelot White's history of deceitful activities aimed at financial enrichment spans several years. His fraudulent endeavors began when he contracted with a Slough-based charity in 2017, falsely claiming his security firm was licensed and charging £11,000 for services he was unauthorized to provide. This led to charges of fraud due to misrepresentation for that incident.

The following year, White encountered a man in an Uxbridge pub, to whom he offered employment at his bogus security operation. After acquiring the man's personal identification documents, White unlawfully insured his vehicle under the man's name, given his own driving ban. Furthermore, he misappropriated £600 from him, resulting in charges of fraud by misrepresentation and theft.

In a similar vein, White swindled another individual he met in a Slough pub by stealing his driving license for insurance purposes and pilfering £80. The victim, a septuagenarian, was thus another of White's targets, leading to a theft charge against him.

His fraudulent activities extended into his role as treasurer for a South Buckinghamshire charity in 2020, where he was found transferring funds to his own account under the guise of managing payroll and expenses, culminating in an additional fraud charge.

Moreover, in 2021, White was discovered driving on an expired license without informing his insurer, incurring a charge for fraudulently failing to disclose information for personal gain.

Investigating officer Patrycja Lesiakowska from the Thames Valley Police remarked, “John Lancelot White, contrary to the chivalrous connotations of his name, preyed on both individuals and charities under the facade of integrity, solely for personal profit.”

She extended her gratitude to the victims for their cooperation with the police investigation and expressed satisfaction with White's incarceration, emphasizing the detrimental impact of fraud on both people and charitable organizations. Lesiakowska highlighted the complex and challenging nature of fraud investigations but affirmed the police's commitment to pursuing justice.

On March 18, 2024, at Reading Crown Court, White entered guilty pleas to multiple charges, including three counts of fraud by false representation, one count of fraud by failing to disclose information for personal gain, two counts of theft, and one count of fraud by abuse of position, culminating in his 22-month prison term.

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Wholesale director jailed for £200,000 fraud

A Birmingham wholesale company director has been imprisoned for 27 months for his role in a scheme that defrauded suppliers out of over £200,000 through falsified accounts following a HMRC tax investigation.

Mohammed Ikram, 41, of Leominster Road, Birmingham, engaged in fraudulent activities as the director of Maxxmed UK Ltd, a wholesale trading entity. Ikram was found guilty of applying for goods on credit, amounting to over £200,000, which he failed to repay. His conviction came after a jury trial at Birmingham Crown Court, which resulted in a guilty verdict for charges of fraudulent trading and falsifying company accounts. In addition to his prison sentence, Ikram has been prohibited from serving as a company director for seven years.

During his tenure at Maxxmed UK Ltd, beginning in December 2016, Ikram orchestrated the purchase of goods on credit, ranging from specialized tools to household items, without any intention of making repayments. The goods, valued at more than £200,000, were delivered to the company's Derby address, although Ikram had misrepresented the company's financial standing to facilitate these transactions.

Ikram's fraudulent activities included submitting inflated financial statements to Companies House in February 2017, falsely claiming assets of £335,006 and shareholders’ equity of £202,333. These fabricated figures were then used to secure credit from unsuspecting suppliers, with the fraud amounting to £201,390.74 in goods acquired between December 2016 and August 2017.

The deception came to light following an investigation by the Insolvency Service, which led to Ikram's arrest in March 2021. Maxxmed UK Ltd, which had been a legitimate commercial entity since 2009, saw no authentic trading activity under Ikram's directorship and was ultimately dissolved in November 2019.

Mark Stephens, the chief investigator at the Insolvency Service, condemned Ikram's actions, emphasizing the agency's commitment to combating financial misconduct and protecting creditors from such fraudulent schemes.

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Hairdresser falsely claimed £50,000 Bounce Back Loan

Anastasia Charalambos Loizou, who operated a unisex hairdressing salon in North London, has been prohibited from serving as a company director for nine years following her involvement in a fraudulent loan application during the pandemic. As the sole director of Little Nicks Barbers 2 Limited, based in Winchmore, Loizou deceitfully secured a £50,000 bounce back loan by falsely claiming her business's turnover was substantially higher than it was in reality.

Loizou applied for the financial aid under the bounce back loan scheme, intended to support businesses affected by COVID-19, stating that the salon's turnover was £300,000. However, the actual turnover for the year ending 31 March 2020 was only £61,659, with the previous year's turnover slightly higher at £67,193, far from the figures claimed in the loan application.

The terms of the bounce back loan scheme stipulated that the loan amount should correspond to 25% of the business's turnover, which, based on Little Nicks Barbers 2's actual earnings, would have qualified it for only £16,799. Loizou's misrepresentation led to the salon receiving £33,201 more than it was entitled to.

Despite obtaining the loan in May 2020, Little Nicks Barbers 2 managed to repay only a small portion before facing financial difficulties, leading to a winding-up petition in May 2022. The business eventually entered liquidation with outstanding debts of £71,805, including £46,969 owed on the bounce back loan and an additional £6,186.47 due to HMRC, funds which were deemed unrecoverable by the insolvency practitioners from Begbies Traynor due to the absence of viable recovery actions for creditors.

The Insolvency Service's decision to disqualify Loizou from directorship underscores the consequences of abusing financial support measures designed to aid businesses during challenging times.