Four men have been jailed for a fraud disguised as a tax avoidance scheme intended to defraud HM Revenue & Customs of £100m.
An investigation by HMRC found the men falsely inflated the expenses of their film productions so investors could collectively claim tax repayments.
They claimed to have spent more than £250m on pre-production and development packages for film projects created in Monaco. But the Revenue service found the packages had only cost £4m and had been created in London.
The four men were jailed for a total of 27 years, after they were found guilty of cheating the public revenue at Birmingham Crown Court.
HMRC has said it will also now begin to recover these repayments from the investors.
The scheme, created by Little Wing Films, said that for every £100,000 invested, higher-rate taxpayers would get £130,000 in tax repayments from HMRC.
It attracted investment from football players, investment bankers and a pop star.
Accountant Keith Hayley, 64, of London, and London-based financial advisers Robert Bevan, 55, and Anthony Charles Savill, 53, both of London, set up Little Wing Films to develop film projects and were all jailed for nine years.
They found more than 275 investors, who between them deposited more than £76m into the scheme, in the belief they were helping the British film industry and legitimately reducing their tax bill.
Norman Leighton, 67, an accountant and corporate services provider based in Monaco who lives in France, helped create the pretence that more than £250m was being spent on genuine activity in Monaco.
He has been given a two-year sentence, suspended for two years.
Together they falsified paperwork to deliberately mislead HMRC investigators.
In an attempt to hide their fraud they established several offshore companies registered in the British Virgin Islands that supposedly operated in Monaco, Geneva and the Channel Islands. These companies were in-turn fronted by family friends in the Philippines and Kolkata.
Simon York, director of HMRC’s fraud investigation service, said: “This was a complex investigation in which great work by HMRC officers uncovered a web of offshore companies, fake transactions and a series of lies.
“The fraud was a deliberate attempt to steal from the taxpayer, as well as investors who now face hefty tax bills.
“These fraudsters were already wealthy individuals who thought they could get away with it – now they are paying the price behind bars.”
