UK: Ex-taxman used offshore firms, accounts for £6.9m fraud scam
12 Oct 2018

A globe-trotting tax consultant who fled the UK before he could be arrested for masterminding a conspiracy to steal £6.9 million from construction workers’ pay packets is now behind bars.

David Michael Hughes, known as Mike Hughes, 52, worked for the Inland Revenue in the 1980s before setting up as a tax consultant in Kent.

According to HMRC, he led a conspiracy which used a string of UK and offshore companies and bank accounts to steal £6.9 million in taxes paid by clients and deducted from workers’ wages, through fraudulent payroll schemes.

The money, which should have been paid to HM Revenue and Customs (HMRC), was split between Hughes and his co-conspirators.

Hughes left the UK in September 2011, travelling to Chile and Dubai before setting up home 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, Turkey.

Hughes set up, and with his co-conspirator Aquil Ahmed, operated more than ten companies in the UK, Belize and Gibraltar to carry out the fraud, laundering the money through various bank accounts, HMRC explained.

They were co-directors of the ‘Keepers’ accountancy and taxation practices based in Rochester, Kent.

The pair employed Christopher Azzopardi to operate payroll services for clients through their various Keepers companies, supposedly calculating wages and paying any tax due to HMRC through the PAYE and Construction Industry Scheme (CIS) systems.

Clients were charged VAT on these services, but nothing was paid to HMRC.

They ran the scam payroll schemes for Victor Shearer’s construction services company Leaner Logistics Limited. He then introduced other clients to the fraudulent payroll scam.

Workers believed their taxes were being paid to HMRC, but instead they were lining the men’s pockets.

Hughes, Ahmed and Shearer channelled money through Gibraltar, the Channel Islands, the UAE, USA, Turkey and various property transactions. Hughes used some of the money to start a new life abroad.

Shearer laundered £1.2 million through a Gibraltar bank account and spent money on property and high-living including ski-holidays, cars and treating friends, family and clients.

Ahmed owned a Bentley, bought properties in the UK, USA and Turkey, took multiple foreign holidays including trips to Dubai and the Monaco Grand Prix.

Recently at a court in London, Hughes was convicted 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.

In June 2016 his Keepers business partner Aquil Ahmed admitted conspiracy to cheat the public revenue. Ahmed was jailed for seven years and eight months in October 2016, and disqualified from being a company director for ten years.

In July 2016 Shearer was convicted of conspiracy to cheat the public revenue and money laundering.

He was jailed for seven years and six months in October 2016, and disqualified from being a company director for ten years.

Christopher Azzopardi was convicted of conspiracy to cheat the public in July 2016. He was jailed for four years in October 2016.

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