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Men jailed over huge £100m tax fraud

10/11/2017

Five men have been jailed today (November 10) for their part in a £100m tax fraud.

Investors believed they would receive significant tax benefits through the "green" investment scheme, which involved the reforestation of large areas of land in Brazil and China.

A total of 730 investors signed up to the scheme, induced by the offer of an immediate large return - a £20,000 investment would result in a successful claim for £32,000 in tax relief.

A number of companies were set up by the defendants around the world and all were marketed on the basis they were independent of each other and acting in their own interests.

They were actually all under control of the defendants, who were cycling cash between them to create an illusion of lending.

Much of the structure was deliberately incorporated in off-shore jurisdictions, such as the British Virgin Islands and the Island of Nevis, often through the agency of Panama-based Mossack Fonseca, with the intention of ensuring its secrecy.

The scheme attempted to deceive HMRC into believing that the overall project was much larger than it was, and into granting tax relief when it was not due.

The schemes generated apparent 'losses' of £269.8million which they said had been spent on research and development, Southwark Crown Court heard during a nine-month trial.

This put HMRC at risk of losing approximately £107million in tax while the defendants siphoned off large sums of money through off-shore trusts to then spend on expensive properties in the UK, Dubai and Australia.

The defendants lied about the nature of their companies - first to HMRC and professional financial advisors and then to a judge of the First Tier Tax Tribunal.

Alison Saunders, Director of Public Prosecutions, said: "This was a major attack on the tax revenue of the UK. This type of criminal activity effectively picks the pocket of every citizen and taxpayer and is rightly pursued by the CPS and our partners with the utmost rigour.

"The scheme was carefully planned and created by these men who used their reputations to promote it.

"The complex nature of the fraud meant that a large international investigation was needed to unpick the financial trail. The CPS worked very closely with HMRC and foreign authorities from an early stage, and over a number of years, to gather compelling evidence."

This trial began in February 2017 after the CPS successfully appealed a decision by a High Court judge to stop the case. In ruling in favour of the CPS in December 2015, the Court of Appeal gave important guidance on the proper approach to disclosure in cases involving large volumes of hard-copy and digital material and concluded that the prosecution had complied with its disclosure duties.

The disclosure process in this case involved large volumes of digital material. The digital material seized as part of this investigation comprised of approximately seven terabytes of data which equates to around five million electronic documents and files.

Ms Saunders added: "The current law on disclosure was implemented prior to the digital age, at a time when unused material was in paper form. Disclosure has been a significant issue during this case, causing the first trial to be brought to an end, and the management of unused material was a major challenge for the prosecution throughout.

"Despite these challenges and following careful presentation of the evidence to the court, the jury has convicted the defendants and they must now face the consequences of their actions."

Ends

Notes to Editors

  1. The defendants were convicted of the following charges:
    • Michael Richards, 55, was convicted of two counts of cheating the public revenue - sentenced to a total of 11 years' imprisonment
    • Robert Gold, 49, was convicted of two counts of cheating the public revenue - sentenced to 11 years' imprisonment
    • Rodney Whiston-Dew, 67, was convicted of two counts of cheating the public revenue - sentenced to 10 years' imprisonment
    • Jonathon Anwyl, 44, was convicted of one count of cheating the public revenue - sentenced to 5.5 years' imprisonment
    • Evdoros Demetriou, 78, was convicted of one count of cheating the public revenue - sentenced to six years' imprisonment
  2. Disclosure is about the handling of material gathered in an investigation which is not used in evidence to ensure the defendants receive all the material which undermines the case or assists their case to ensure a fair trial.
  3. For the latest in breaking news from the CPS Press Office follow @cpsuk on Twitter and visit our official News Brief - blog.cps.gov.uk
  4. For media enquiries call the CPS Press Office on 020 3357 0906. Out of Hours - 07590 617233