Two men who faked charity donations so they could fraudulently claim more than £5 million in Gift Aid repayments have been jailed for a total of 19 years between them after their scam was uncovered by HM Revenue and Customs (HMRC).
John Davies, 58, and Olsi Vullnetari, 37, claimed they were trustees and associates of two charities, the Sompan Foundation and the Kurbet Foundation.
An investigation by HMRC discovered that while both charities had been legitimately set up to support women and children in crisis and poverty around the world, John Davies spotted what he thought was a golden opportunity when the charities’ original founder died – to turn them into an illegal money-making scheme.
The pair submitted tens of thousands of Gift Aid repayment claims, between 2007 and 2012, based on donations seemingly made by generous taxpayers. However, HMRC discovered that every single donation had been faked and that the men had used the names and addresses of real people, including some of whom had passed away, to claim the Gift Aid.
John Davies’ son, Ben Davies, 31, was also jailed for associated money laundering.
David Margree, Assistant Director, Fraud Investigation Service, HMRC, said:
“These fraudsters despicably extorted £5 million from honest British taxpayers. Gift Aid is in place to support legitimate charities and offer extra funding, not for the financial benefit of criminals who abuse the system.
“HMRC and our partner, the Crown Prosecution Service, have brought to justice these fraudsters who, had they not been stopped, would have continued to rob public services and genuine charities of a great deal more.
“HMRC has already seized more than £848,000 from these tax cheats and we will look to recover further criminal profits. If you want to report a tax fraud please call our 24-hour hotline on 0800 59 5000.”
The scam was orchestrated by John Davies with £5,038,198.63 being paid to the registered charities. The men produced false paperwork to support the Gift Aid claims and the proceeds of the fraud were then laundered through various bank accounts, including accounts in Hungary, the Netherlands, Thailand, South Africa, America, the UAE and Ireland, and through a separate Hungary-based ‘charity’, The Tosk Foundation, which was set up by John Davies.
The Tosk Foundation, whose headquarters are located near the Davies family home in Balastya, Hungary, received around £1.6 million in payments.
All three men were arrested between May 2013 and June 2015, and later charged with cheating the public revenue and money laundering. John Davies and Vullnetari were later found guilty of all charges on 8 April 2016. Benjamin Davies was found guilty of one count of money laundering on the same date.
The men were sentenced today (13 May 2016) by HHJ Tomlinson at Southwark Crown Court.
Notes for Editors
- John DAVIES, DOB 7/7/1957, of Harvest Court, Esher, Surrey, now and at the time of his arrest on 29 January 2014, was charged on 21 May 2014 with fraud and money laundering offences. He was found guilty on all counts at Southwark Crown Court on 8 April 2016 and remanded in custody. John Davies was jailed for 12 years at the same court on 13 May 2016. DAVIES was lead advisor and consultant for charities: The Sompan Foundation, The Kurbet Foundation and The Tosk Foundation. He was the main beneficiary of criminal funds, and he laundered money via The Tosk Foundation to his son Benjamin Davies' personal accounts. John Davies has several aliases, Dr John Davies, aka John Shelton, aka John Glyn Davies, aka Glyndwr Selwyn Owain Davies.
- Olsi VULLNETARI, DOB 19/10/1977, of Charney Avenue, Abingdon, Oxfordshire, now and at the time of his arrest on 16 June 2015, was charged on 31 July 2015 with fraud and money laundering offences. He was found guilty on all counts at Southwark Crown Court on 8 April 2016 and remanded in custody. Vullnetari was jailed for seven years at the same court on 13 May 2016. VULNETARI, aka Thomas Hamilton, a software programmer, was a trustee for both charities. He dealt with matters in his real name for The Sompan Foundation, however for The Kurbet Foundation he appeared as Thomas Hamilton, an identity belonging to an Irish school teacher not connected to the fraud. In both names and for both charities, VULLNETARI was involved in transferring approximately £1 million to bogus charities across Europe. Around £300,000 went to charities in the Netherlands which he was linked to. His sister was a former partner of John DAVIES.
- Benjamin DAVIES, DOB 20/10/1984, of Melrose Avenue, Wimbledon, SW19, at the time of his arrest on 8 May 2013, was charged on 21 May 2014 with fraud and money laundering offences. Now of Allanson Road, Manchester, he was found guilty of one count of money laundering at Southwark Crown Court on 8 April 2016. Benjamin Davies was jailed for three years at the same court on 13 May 2016. DAVIES was a former trustee for The Sompan Foundation, dealing with charity matters in a position held for three years. He laundered Gift Aid repayments via The Tosk Foundation and several other charity sounding accounts, all believed to be under his or his father’s control.
- The Sompan Foundation, which HMRC regards as fraudulent, was managed by Benjamin Davies. £3,294,450.43 in Gift Aid (nearly £3.3m) was successfully claimed between year ending 31 December 2007 and May 2012. HMRC interventions stopped further payment of £175,350 for the period 10 June 2012 to 30 June 2012.
- The Kurbet Foundation,which HMRC regards as fraudulent, successfully claimed £1,743,748.20 in Gift Aid (£1.74m). HMRC has recovered £848,000 from The Kurbet Foundation’s bank account.
- The money obtained by John DAVIES and Olsi VULLNETARI has been filtered worldwide to countries including Hungary, the Netherlands, Thailand, Bangladesh, South Africa, New Zealand, Australia, America, the UAE, Canada, Italy and Ireland.
- The fraudulent Gift Aid claims totalled £5,560,350.00 (£5.56 million), of which £5,038,198.63 (£5.03 million) was paid out to the registered charities. Over half-a-million pounds (£530,350) was withheld by HMRC and £848,000 has already been recovered.
- Gift Aid tax relief allows charities to claim back 25 pence every time an individual donates £1 to their charity.
- All three were jointly charged with two counts of Cheating the Public Revenue, contrary to common law, and an individual count each of money laundering, contrary to section 327(1) of the Proceeds of Crime Act 2002. The fraud took place over five-and-a-half years. Benjamin Davies was found guilty of money laundering only.
- The eight-week trial began on 15 February 2016. A fourth person was acquitted on 8 April 2016.
- The Kurbet Foundation was registered at a mail box address in Kingston upon Thames, Greater London. The Sompan Foundation was registered at a previous home address of Benjamin Davies in Laurel Road, Wimbledon, SW20, then Melrose Avenue, Wimbledon, SW19, also at self-serviced office accommodation in Kingston upon Thames. Both charities have ceased to exist.
- HMRC’s flickr site www.flickr.com/hmrcgovuk
- Follow HMRC’s press office on Twitter @HMRCpressoffice
Issued by HM Revenue & Customs Press Office
HM Revenue & Customs (HMRC) is the UK’s tax authority.
HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.