David Hughes was found guilty after a trial in Southwark Crown Court

Tax consultant who masterminded £6.9m construction scam goes to jail

20 August 2018 | By GCR Staff 2 Comments

A tax consultant who masterminded a conspiracy to steal £6.9m from HMRC has been sentenced to nine-and-a-half years in prison.

“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”– Alison Chipperton, HMRC assistant director

David Michael Hughes, 52, was convicted at Southwark Crown Court last week 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.

Hughes worked for the Inland Revenue in the 1980s before setting up as a tax consultant. He then led a conspiracy that used more than 10 companies in the UK, Belize and Gibraltar to carry out the fraud, in which payroll taxes were siphoned off from workers’ pay

One of his accomplices, Aquil Ahmed, 61, admitted conspiracy to cheat the public revenue and was jailed for seven years and eight months, and disqualified from being a company director for 10 years.

Hughes and Ahmed were directors of the Keepers accountancy and taxation practice, based in Rochester, Kent. They ran the payroll fraud for a construction services company called Leaner Logistics, run by Victor Shearer, 44.

Shearer, who was jailed after a six-week trial, introduced other clients to the fraudulent payroll scam.

Hughes, together with other fraudsters, would calculate the tax and salary requirements from the firms and request a cheque from them. They would then deposit the tax in companies with an almost identical name.

Shearer, who laundered £1.2m through a Gibraltar bank account, used the money to buy property, ski holidays and cars. Ahmed owned a Bentley, bought properties in the UK, US and Turkey, and took multiple foreign holidays including trips to Dubai and the Monaco Grand Prix.

The two accomplices, and a third man, Christopher Azzopardi, were sentenced in October 2016, however Hughes left the UK in September 2011, travelling to Chile and Dubai before basing himself in Northern Cyprus, which does not have an extradition treaty with the UK.

He was arrested by HMRC investigators at Heathrow Airport in January 2018 when he arrived on a flight from Istanbul.

Alison Chipperton, an assistant director of HMRC, said: “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.”

James Lewis, of the Crown Prosecution Service, 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. The CPS will now take steps to recover Hughes’ criminal assets under the Proceeds of Crime Act.”

In January of this year, Ahmed and Shearer were ordered to repay £3.5m within three months or face extensions on their prison sentences – five years for Ahmed and three years for Shearer.

Image: David Hughes was found guilty after a trial in Southwark Crown Court

Further reading