A second professional tax adviser working for the Vantis Tax Ltd group was today jailed for four years for his part in a £70 million tax fraud.
Roy Faichney, Managing Director of Vantis Tax Ltd, had a “gentleman’s agreement” with his deputy, David Perrin – who was found guilty for his part in the fraud in January – to share the £4.5 million profit from a fraudulent tax avoidance scheme sold to wealthy customers, which left charities and Exchequer out of pocket.
Acting together they extracted the cash they made through a Jersey bank, where Faichney withdrew his share to spend on luxury properties and paintings, while also using the scheme to evade tax on his £200,000-plus company salary.
Faichney, along with Perrin, used a network of finance professionals to advise more than 600 wealthy clients to buy shares, worth a few pence each, in four new companies they had set up. He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares simply to inflate their price.
The share owners then donated 329 million shares to various unsuspecting registered charities and tried to claim £70 million tax relief on a total of £213 million of income and company profits. This was based on the shares being worth up to £1 each, when in fact they were still worth the pennies they were originally bought for.
The scheme proved so popular that Vantis employees performed a smug celebratory song at their annual conference, to the tune of “I will survive”. It included the verse: “They should have changed that stupid law, they should have b***ered charity, but they have left that lovely tax relief, for folks to pay to me.”
His Honour Judge Blacksell QC, at Blackfriars Crown Court, said:
“If you ever had a moral compass you lost it or buried it under the property purchases, furnishings, holidays and cruises.
“The general public are sick and tired of men such as you and schemes such as this. This is high net worth fiddling. The general public should applaud the dedication and commitment shown by HMRC in pursuing all aspects of this case. They have been well served.”
In addition to the four year custodial term Faichney was disqualified from acting as a director for the next 10 years.
A timetable for confiscation proceedings has been put in place to recover the benefit Faichney obtained from his criminal activities.
This was the second time Faichney stood trial on this charge as no decision could be reached by the jury when he was tried jointly with Perrin.
Jenny Crutchfield, of HMRC Criminal Investigations, said:
“Faichney thought he could attack and defraud the tax system by using his knowledge as a tax adviser. Together with Perrin, not only did he attempt to cheat taxpayers out of millions of pounds, but callously abused a tax relief designed to benefit charities by arranging the gifting of 329 million virtually worthless shares. We are delighted that after an extensive investigation we are able to make these two men pay for their cynical actions.”
It can now be reported that David Perrin’s 18 months sentence for his part in the fraud was referred to the Court of Appeal by the Solicitor-General for review. On 5 July 2012 the Court of Appeal found that Perrin’s sentence had been unduly lenient, and stated that the starting point for a case such as this, before mitigating factors are taken into account and involving prejudice to the public Revenue on a very considerable scale, should be seven years’ imprisonment. However, due to Mr Perrin’s health, the Court of Appeal did not alter the 18 month sentence he received.
Notes for editors
Details of defendant: Roy Faichney, DOB 09/03/58, of Barnhill, Pinner, Middlesex.
Faichney was charged with cheating the Revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief that falsely stated values of shares which were gifted to charities.
The scheme was sold to the wealthy individuals between 2005 and 2006.
If you give land, property or qualifying shares to a charity, or sell them to a charity at less than their market value, you can claim Income Tax relief and lower your tax bill, as well as getting Capital Gains Tax relief. For more information, see here
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.