| VAT officer jailed for £33k fraud |
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| Written by Adrie van der Luijt | |
| Tuesday, 29 April 2008 | |
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A railway enthusiast who also worked as a VAT officer has been jailed for VAT fraud.
Richard Thornton, of Llanddulas, North Wales, was accused of fraudulently obtaining a £32,950 VAT repayment to pay off debts. Knowledge of VAT system exploited The investigation by HM Revenue & Customs' (HMRC) criminal investigation directorate, and subsequent prosecution by the Revenue & Customs Prosecutions Office (RCPO), followed an elaborate fraud involving the sale of rolling stock between companies created by Thornton, some of whom had false company 'directors' named after Victorian railway engineers. Thornton had denied two charges of VAT fraud but was found guilty at Mold Crown Court. He has been sentenced to two and a half years in prison. Speaking after the case Martin Greening, an assistant director for criminal investigation at HMRC, said that the fraud was a deliberate attempt on the part of an HMRC officer to exploit his knowledge of the VAT system to pay his personal debts. “The vast majority of our officers conduct themselves with the utmost integrity but we will investigate anyone who we suspect of VAT fraud, as they defraud HMRC, the public and our public services," he added. Overwhelming evidence Judge John Roberts QC, in sentencing Thornton said that he was "thoroughly dishonest" and had "committed a gross breach of trust". He added that the defendant had been found guilty in the face of overwhelming evidence, and commended the work of the HMRC investigators. The court heard that lifelong railway enthusiast Thornton, 43, purchased land and a third of a mile of rail bed at Bodfari, Denbighshire in 2001. This was subsequently named the Bodfari Railway Centre and Thornton set about obtaining stock for the centre. He was later to give this location as the contact address for three railway themed companies. The same year, Thornton registered the Denbigh and Mold Junction Railway Society for VAT. In 2003 he arranged to buy two company names from a formation agent in London. VAT returns He then set up Park Royal Vehicles Ltd and Mold and Denbigh Junction Railway Company Ltd. These companies were later incorporated into the Bodfari Railway Centre, with Thornton as the only shareholder. Park Royal's directors were named at Companies House as Francis Webb and John Ramsbottom and its company secretary George Whale. Mold and Denbigh Junction Railway Company's directors were listed as George Whale and John Ramsbottom. During this time Thornton failed to obtain planning permission for the railway centre at Bodfari. Most of the stock was subsequently moved elsewhere. In the meantime, VAT returns for each company were submitted. Each company had a slightly different address, showing slight variations to Thornton's home address. It soon became clear to HMRC investigators that these companies were being run by the same person, and from the same address. Efforts were being made to give the impression that the businesses were in fact separate and at different locations. Value below the amount invoiced In June 2005 Denbigh and Mold Junction Railway Society issued an invoice for £185,000 plus VAT to Park Royal Vehicles Ltd for the sale of rolling stock, spare parts and equipment. PRV Ltd subsequently submitted a false VAT return resulting in a VAT repayment of £32,392.50. This repayment was made by HMRC by payable order, which was deposited into an account belonging to Richard Thornton. HMRC investigators soon established that Thornton quickly repaid a loan, two credit cards and his solicitor after the VAT repayment was made. In addition the value of the rolling stock was considered to be well below the amount invoiced, although Thornton claimed that this was because the stock was to be refurbished by the buyer and would be worth this amount later. Enquiries soon revealed that Francis Webb and George Ramsbottom were long dead but eminent Victorian railway engineers. This case was successfully prosecuted by the Revenue and Customs Prosecutions Office (RCPO). RCPO is an independent prosecuting authority reporting directly to the Attorney General, and is responsible for the prosecution of all HMRC cases. Related articles
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