The scheme, created by Little Wing Films, boasted that for every £100,000 invested higher rate taxpayers would get £130,000 in tax repayments from HMRC, and attracted investment from football players, investment bankers and a pop star.
Accountant Keith Hayley and London-based financial advisors Robert Bevan and Anthony Charles Savill set up Little Wing Films to develop film projects. They found more than 275 investors, who between them deposited more than £76 million into the scheme in the belief that they were helping the British film industry, while legitimately reducing their tax bill.
The men claimed to have spent more than £250 million on pre-production and development packages for film projects created in Monaco. However, the HMRC investigation discovered that the packages had only cost £4 million and had been created in Little Wing’s offices in London. Overall, the gang falsely inflated expenses to more than £275 million to increase the scheme’s financial losses, which enabled investors to collectively claim around £100 million in tax repayments. HMRC will now begin to recover these repayments from the investors.
Norman Leighton, an accountant and corporate services provider based in Monaco, helped create the pretence that more than £250 million was being spent on genuine activity in Monaco.
Hayley, Bevan and Savill were the architects of the scheme and they, along with their associates, falsified paperwork to deliberately mislead HMRC investigators. In an attempt to hide their fraud they set up offshore companies, including Fat Cat Films Ltd, and falsely inflated the amounts that had been invested into the scheme and the expenses paid out.
They arranged for companies to be registered in the British Virgin Islands that supposedly operated in Monaco, Geneva and the Channel Islands, all fronted by family friends in the Philippines and Kolkata. However, each did little more than pass investor funds through their bank accounts, from one to another numerous times, to inflate the amount invested and therefore the scheme’s losses.
The men were found guilty at Birmingham Crown Court and are due to be sentenced at the same court on 24 June 2016.