Former tax inspector who stole £7m jailed
A former UK tax inspector who set up fake companies to steal almost £7m in unpaid tax has received a nine and a half year prison sentence.
David Michael Hughes, known as Mike Hughes, 52, set up a number of companies to deal with payroll services on behalf of other businesses.
The court heard he used a string of UK and offshore companies and bank accounts to steal £6.9m in taxes paid by clients and deducted from workers’ wages.
The money, which should have been paid to HM Revenue and Customs (HMRC), was split between Hughes and his co-conspirators.
Hughes worked in the 1980s for what was then the Inland Revenue, before setting up his own tax consultancy firm.
Hughes set up, and with co-conspirators, operated more than 10 companies in the UK to carry out the fraud, laundering the money through various bank accounts.
The stolen money was then laundered by transferring it through bank accounts set up in Gibraltar and Belize, controlled by Hughes. From there, the money was transferred to bank accounts in, among other places, Jersey, Guernsey, Turkey, Dubai, the USA and Chile.
David Hughes left the country in September 2011, travelling to Chile and Dubai before setting up home in northern Cyprus, but he was arrested at Heathrow Airport in January this year.
Sentencing him at Southwark Crown Court, Recorder David Etherington QC said Hughes had committed a “deliberate, calculated fraud that was brazen and bold from the outset”.
He was convicted of three counts of conspiracy to cheat the public revenue, two counts of false accounting and furnishing false information, and one count of money laundering.
James Lewis, a specialist prosecutor in the CPS Specialist Fraud Division, said: “Hughes used his knowledge of the tax system to create a highly elaborate scheme in order to defraud HMRC in an attempt to make himself millions. He exploited legitimate business practices and created fake company identities in order to cover up his criminality.
“Attempting to cheat the tax system for one’s own benefit causes serious harm to society.”
HMRC has already secured confiscation orders totalling £3.5 million against two of the co-conspirators, and will now apply for similar orders against Hughes.