Regulation  

Fake adviser cons clients in £1.6m stamp duty fraud

A fraudster who posed as a professional adviser pleaded guilty to seven counts of fraud by false representation at Newcastle Crown Court on 30 October.

Newcastle-based Malcolm Stewart Graham, 37, received a two-year prison sentence on each count, to run concurrently, suspended for two years.

He was also disqualified as a director for five years.

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He attempted to defraud HM Revenue & Customs out of £1.6m by conning clients to sign up to a fraudulent scheme to help reduce their stamp duty land tax liabilities.

Mr Graham promoted a stamp duty land tax scheme, claiming investors could save millions of pounds in stamp duty land tax.

It was, however, a complete fraud with Mr Graham using altered legal documents to make the scheme appear legitimate.

He funded a lavish lifestyle by signing up hundreds of wealthy customers, charging them a 50 per cent administration fee on any reduction in tax their scheme generated.

The plan manipulated the clients’ property transactions and tax returns to fraudulently reduce the amount of stamp duty they owed to HMRC.

HMRC has taken action to recover the stamp duty, plus interest, from Mr Graham’s clients.

Mr Graham became the centre of an HMRC criminal investigation after it was discovered that he had set up the fraudulent tax avoidance scheme.

He targeted a number of financial advisers, claiming the scheme would reduce their clients’ tax liabilities.

However, rather than operating a scheme to save them money, he was reaping huge financial rewards at their expense.

Gary Forbes, acting head of criminal taxes unit at HMRC, said: “Malcolm Graham was posing as a professional adviser and was not only trying to defraud HMRC out of millions of pounds but was also more than happy to rip off clients who had trusted him.

“Graham was formerly a solicitor who was struck off in 2009 for dishonest practice, so he clearly knew that altering legal documents was a criminal offence but simply chose to ignore the law for a financial gain.”