A Staffordshire company director, who pretended to trade in designer jewellery, IT services and sports equipment to steal more than £204,000 VAT, has been jailed after HM Revenue and Customs (HMRC) exposed his fraud.
Mike East, formally known as Michael David Bull, 32, of Swallow Croft, Lichfield, submitted several suspicious VAT repayment claims to HMRC in 2013 and 2014, prompting an investigation.
Sentenced alongside East, Paula Wilkes, 39, a company director and Jake Hilton Reeves, 26, who allowed their companies to be named on fake invoices. Both were paid a cut of East’s stolen VAT for assisting with the tax fraud.
Richard Young, Assistant Director, Fraud Investigation Service, HMRC, said:
“These three criminals were attempting to steal a substantial sum of money from taxpayers. East provided dozens of fake documents to convince HMRC he was genuinely trading under several guises - none of which was true. Wilkes and Reeves were fully involved in the fraud and took payments for their participation. HMRC is determined to clamp down on financial crime and make sure that there is a level playing field for all businesses.
“If you know of anyone committing tax fraud you can report them by calling our 24-hour hotline on 0800 59 5000 and help us stamp it out.”
East was sentenced to 27 months jail at Birmingham Crown Court on 2 November 2016. HMRC officers uncovered a myriad of false documents and lies involving more than four businesses linked to him and the VAT repayment claims. The investigation revealed that he, and his two accomplices, had provided false invoices for goods and services that did not exist.
Notes for editors
1.Mike East, formally known as Michael David Bull, DOB 19/02/84, a director of Giffords Croft, Lichfield, Staffordshire, was sentenced to 27 months imprisonment yesterday at Birmingham Crown Court. On 8 January 2016, East pleaded guilty to 10 counts of making a false statement for the purposes of the Value Added Tax Act 1994. East had attempted to claim VAT repayments totalling £204,050.21. During the investigation HMRC scrutinised his business records and withheld £149,912.59 as a precaution. MD Trading and La Bulle Ltd made the VAT repayment claims all based on false invoices. Bull attempted to reclaim the VAT by submitting 10 VAT returns to HMRC for the purchase of diamonds and sports equipment from his accomplices or other, non-VAT registered individuals. Bull also traded between his different businesses, raising fake invoices as a ‘purchaser’ from one identity and ‘supplier’ to another of his firms.
2.Paula Wilkes, DOB 21/09/77, a director, of Sandfield Meadow, Lichfield, Staffordshire, was charged with three counts of making a false statement for the purposes of the VAT Act 1994 and entered a not guilty plea on 8 January 2016. She was found guilty of all charges at trial on 23 June 2016. Wilkes was sentenced to 15 months jail suspended for two years and a 200-hours community work order. Wilkes allowed fake invoices to be issued under her courier company name for Bull to reclaim VAT. HMRC investigators found that Wilkes was paid £4,026 by Bull for her part in the VAT fraud.
3.Jake Hilton Reeves, DOB 01/01/90, apprentice plumber, of Handel Walk, Lichfield, Staffordshire, was sentenced to 12 months jail suspended for two years, a supervisions requirement for six months and a 180-hour community work order on 2 November 2016. He changed his plea to guilty on 19 February 2016 and admitted one count of making a false statement for the purposes of the VAT Act 1994: While unemployed, he allowed his name to be used on fake invoices for non-existent services, charged to Bull’s company. HMRC investigators found that Hilton Reeves had been paid £18,206 by Bull for his part in the VAT fraud.
4.The four businesses associated with this fraud are:
- MD Trading – as this entity Michael Bull was a sole trader claiming to be an IT consultancy service.
- La Bulle Limited, Bull was also the sole director of this company concerned in the design and sale of jewellery. Bull created fake purchase invoices for raw materials such as diamonds and design services for this business.
- Keep Right On Couriers Ltd (KRO Ltd) registered at an address in SW6 London, Paula Wilkes was the sole director of this firm. Bull attempted to claim £30,851.95 in VAT for sports equipment purchased from this courier company on invoices but KRO Ltd had not listed the transaction in their corresponding VAT records. HMRC believe the sports equipment never existed.
- Jake Hilton Reeves, who was not VAT registered, invoiced La Bulle Ltd for his services claiming to be a self-employed jewellery designer.
5.Anyone with information regarding fraud is encouraged to contact the HMRC 24-hour Hotline on 0800 59 5000 or report it online via: http://www.hmrc.gov.uk/reportingfraud/online.htm
6.Follow HMRC Press Office on Twitter @HMRCpressoffice
7.HMRC's Flickr channel: www.flickr.com/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.