‘Greed-driven’ UK tax consultant used Channel Islands to launder stolen millions

Wednesday 22 August 2018

A ‘greed-driven’ UK tax consultant jailed for masterminding a scheme to nab £7m. from construction workers’ pay packets laundered the stolen money through Guernsey and Jersey bank accounts.

52-year-old David Hughes was sent to prison for nine-and-a-half years by Southwark Crown Court last week for “deliberate, calculated fraud that was brazen and bold from the outset.”

Hughes, who had previously worked for Inland Revenue before becoming a Kent-based tax consultant, set up a number of companies to handle payroll services on behalf of other businesses.

Along with a team of other fraudsters, who were also imprisoned following separate trials, he calculated the firms’ tax and salary requirements before requesting a cheque from them.

But instead of then paying that money to HMRC, he used fake companies he set up with nearly identical names to deposit the funds.

That money - £6.9m. in total, which primarily came from construction firms – was then laundered through bank accounts in Jersey and Guernsey, as well as Turkey, Dubai, the USA and Chile, before being used to line the criminal gang’s pockets.

In 2011, Hughes fled the country, using some of that money to relocate to northern Cyprus, which doesn’t have an extradition treaty with the UK. However, he was tracked down and arrested by Police at Heathrow in January.

His colleagues, meanwhile, splurged their stolen funds on high-value holidays, including trips to the Monaco Grand Prix, cars, and foreign property. The trio were jailed for 19 years in total in 2016.

Last Thursday, Hughes was found guilty by a jury after a four-week trial for cheating the revenue, false accounting and money-laundering. 

Specialist Prosecutor of the Crown Prosecution Service, James Lewis, said that Hughes’ actions were not only detrimental to the businesses that used his fake service, but the wider public.

“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,” he commented. “Attempting to cheat the tax system for one’s own benefit causes serious harm to society."

“The CPS will now take steps to recover Hughes’ criminal assets under the Proceeds of Crime Act.”

Alison Chipperton, Assistant Director of HMRC’s Fraud Investigation Service, added: “Hughes and his criminal fraternity were driven by greed, abusing systems that are designed to ensure workers are paid correctly and taxes paid to HMRC. Hughes deliberately fled the UK and moved to a country without a UK extradition treaty in an attempt to evade justice. He was arrested as soon as he returned to the UK, and is now paying the price for his crimes. 

“They were all professionals who broke the law, but as a tax consultant and former Inland Revenue employee, Hughes’ role as the criminal mastermind is even more deplorable. Tax evasion isn’t a victimless crime, it is theft from public services used by us all. If you suspect tax fraud, please report it online or call the HMRC Fraud Hotline on 0800 788 887.”