What the Ecclestone charges reveal about HMRC's fraud approach

What the Ecclestone charges reveal about HMRC's fraud approach
Bernie Ecclestone stepped down as Formula 1 chief executive in 2017. (Maxim Shemetov/Reuters)

Bernie Ecclestone, the former Formula 1 boss, has been charged with fraud by false representation following an investigation by HM Revenue & Customs.

HMRC allege that Ecclestone, 91, failed to declare overseas assets of more than £400mn, consequently – they say – evading his UK tax liabilities. 

Ecclestone amassed a vast personal fortune while running F1, and is today worth an estimated £2.5bn. 

According to German court papers obtained by BBC Panorama in 2014, he reportedly receives divorce maintenance payments of around $100mn (£81.4mn) each year from his ex-wife.

Ecclestone is expected to appear at Westminster Magistrates' Court on August 22, where the case is likely to be remitted to the Crown Court in light of the amounts at stake and the apparent factual complexity. 

That would mean Ecclestone would be tried by jury at a later date. Ecclestone has not commented on the charge and is innocent in English law unless convicted of the offence.

The elements of the offence of committing fraud by false representation are that a person dishonestly makes a false representation (eg a statement he knows or believes to be wrong) either to make a gain for himself or another or to cause loss to another. 

To secure a conviction, the offence must be proven by the Crown beyond reasonable doubt. The maximum sentence on conviction in the Crown Court is 10 years’ imprisonment, an unlimited fine, or both.

The decision to charge Ecclestone was taken by the Crown Prosecution Service independently of government (including HMRC).

In reaching its charging decision, the CPS reviewed a file of evidence collected by HMRC’s Fraud Investigation Service. HMRC’s investigation, which led to the charge, is said to have been “complex and worldwide”.

Mounting a defence 

It is not known how Ecclestone will plead or what, if he pleads not guilty, his defence will be. 

Typically, the first step for the defence in a trial of this sort is to put the prosecution to proof that the alleged elements of the offence have each been proven beyond reasonable doubt. 

If the defence team considers that they have not, then they can ask the judge to dismiss the charge. 

Subject to that, the defence will offer evidence in an attempt to show the jury that reasonable doubt exists as to one or more of the elements of the offence. 

For example, the defence might seek to demonstrate that the representation (or representations) were not false – or not knowingly false – and/or that there was no intention to make a gain or to cause loss to another. 

This might involve factual evidence to undermine the prosecution’s case, or evidence indicating that the accused’s state of mind was not dishonest, for example. 

The defence might also run technical legal arguments to persuade the judge that the relevant requirements have not been met and the case should be discontinued.