A group of film producers, accountants, financial advisers and investment bankers who attempted to cheat the tax system out of £2.2 million have been jailed for more than 36 years after a complex investigation by HM Revenue and Customs (HMRC).
The scheme, cooked up by wealthy professionals, involved claiming false tax rebates linked to contrived investments in film-making partnerships.
The partnerships claimed to have spent £5.7 million and made significant financial losses on two UK film projects, ‘Starsuckers’ and ‘Mercedes the Movie’. These artificial losses enabled the wealthy investors to falsely claim back around £40,000 in tax relief for every £20,000 they had invested.
HMRC identified a series of suspicious tax rebate claims, which investigators discovered had originated from two fraudulent tax avoidance schemes that had been set up and managed by Monaco-based accountant Terence Potter, 56.The claims were supported by false documents produced by Potter.
Jennie Granger, Director General, Enforcement and Compliance, HMRC, said:
“This was an audacious attempt to defraud HMRC and was motivated by the pure greed of dishonest and wealthy individuals. The majority of those involved in this fraud had no interest in the film industry, or regard for the impact of their criminality on honest taxpayers.
“After painstaking and complex work from our investigators, and a series of long trials, HMRC has dismantled the fraudulent operation, and shown that we have the intent and capability to bring criminals to justice regardless of their resources. The long sentences handed down send a powerful message to those tempted to deceive HMRC. Nobody is beyond our reach.”
Potter not only devised and promoted the schemes to wealthy professionals, he produced false documents in a bid to make the schemes look legitimate. He was assisted by independent financial adviser, Neil Williams-Denton, 42, who also promoted the schemes to high earning investment bankers.
Three investment bankers, Phillip Jenkins, 51, James Hyde, 43, and Hamish MacLellan 43, were each convicted of one count of Conspiracy to Cheat the Public Revenue, and sentenced to thirteen and half years in prison, collectively. And, in the latest trial, two independent film producers, Chris Walsh Atkins, 40, and Christina Slater, 37, were convicted of Conspiracy to Cheat the Public Revenue, theft and fraud and sentenced to a total of nine years in prison today (Friday 1 July 2016). Their role in the fraud was to circulate money and produce falsely inflated invoices.
More than 100 officers from HMRC's Fraud Investigation Service took part in the operation that led to the arrests in February 2012. Eighteen properties were searched and computers, business records and mobile phones were seized.
The majority of the tax refunds claimed by investors were withheld and £500,000 which had been paid out initially, has since been recouped by HMRC.
Investigations to recover further proceeds of the crime are under way.
Notes for editors
1. Sentenced at Southwark Crown Court on 1 July 2016:
- Christopher Walsh Atkins, DOB 07/05/1976 of Lambie Street, London, NW5, a film producer was found guilty of two counts of Conspiracy to Cheat the Public Revenue, theft and fraud on 24 June 2016 and sentenced to five years in prison. He was also disqualified from acting as a company official for 12 years.
- Christina Slater, DOB 02/04/1979 of Copps Road, Leamington Spa, Warwickshire, a film producer was found guilty of two counts of Conspiracy to Cheat the Public Revenue, theft and fraud on 24 June 2016 and sentenced to four years in prison. She was also disqualified from acting as a company official for 12 years.
Sentenced at Southwark Crown Court on 18 December 2015:
- Terence Sefton Potter, DOB 24/01/60 of HM Prison Service, formerly of Balmoral Park, Singapore, and before that of Monaco. Potter was convicted in September 2015 of one count of Conspiracy to Cheat the Public Revenue. He subsequently pleaded guilty to three further counts of Conspiracy to Cheat the Public Revenue and was sentenced to eight years imprisonment for each count in December 2015, to be served concurrently.
- Potter was an accountant and tax specialist and a former partner in Ernst & Young and although involved in film productions was principally a promoter of tax avoidance and evasion schemes.
- Neil Williams-Denton, DOB 17/07/73 of Greenmount Bolton, Greater Manchester, was an independent financial adviser for Greystones Financial Services at the time of his arrest. Williams-Denton was convicted in September 2015 of one count of Conspiracy to Cheat the Public Revenue and then found guilty on a second count in December 2015. He was sentenced to six years imprisonment for each count to be served concurrently. He actively ‘sold’ and promoted Potter’s schemes to wealthy individuals.
Sentenced at Southwark Crown Court on 18 September 2015:
- James Hyde, DOB 29/10/72 of HM Prison Service and formerly of Grove Farm, Ivinghoe Aston, Buckinghamshire, was found guilty and sentenced to four and a half years in prison. Hyde was an investment banker working for Jeffries International at the time of his arrest and invested almost £100,000 in the scheme.
- Phillip Jenkins, DOB 04/06/65 of HM Prison Service and formerly of Ketches Lane Sheffield Park, Uckfield, Sussex, was found guilty and sentenced to four and a half years in prison. Jenkins was an investment banker working for Jeffries International at the time of his arrest and invested almost £100,000 in the scheme.
- Hamish MacLellan, DOB 10/10/72 of HM Prison Service and formerly South Hill Park, London, NW3, was found guilty and sentenced to four and a half years in prison. MacLellan was an investment banker working for Jeffries International at the time of his arrest and invested almost £100,000 in the scheme.
2. All defendants were charged with Conspiracy to Cheat the Public Revenue.
3. Four other bankers were found not guilty following a retrial in December.
4. HMRC has been working with the tax profession to tackle those who promote tax avoidance schemes. Promoters of Tax Avoidance Schemes legislation, introduced by Parliament in 2014, is aimed at tackling those who push the boundaries of the rules, and carries consequences for those who fail to change their behavior.
5. HMRC’s Flickr channel: www.flickr.com/hmrcgovuk
6. Follow HMRC on Twitter @HMRCgovuk
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.