VAT Fraud

Three company directors, who fraudulently claimed almost £220,000 in VAT repayments by pretending to sell a Bloomsbury hotel they didn’t own, have been sentenced.

Robin Reichelt, Stephen Nathan and John Gibbs claimed to have sold the hotel from one of their companies to another, but HMRC investigators uncovered false invoices and a fictitious credit note used to fake the VAT repayment claim.

John Cooper, HMRC’s assistant director of criminal investigation at HMRC, said:

‘This was a sophisticated and blatant fraud committed by three criminals who tried to beat the system but were caught. Frauds of this nature mean that our investigations are increasingly complex, but we are committed to pursuing those responsible so that they can be prosecuted and the money stolen from the British taxpayer recovered.’

In 2005 Stephen Nathan raised an invoice from his company Pure Energy & Power PLC for the sale of a lease on a hotel in Bloomsbury, London that it did not own. This fraudulent invoice included VAT. Reichelt and Gibbs, his two fellow defendants, falsely claimed to have bought the hotel through their company A2Z Properties Ltd, and then proceeded to claim back the £218,750 VAT from the fictitious transaction. Shortly after, Pure Energy & Power PLC went into liquidation and A2Z Properties Ltd ceased trading.

All three were charged on 11 January 2010 with conspiracy to cheat the Public Revenue. Nathan and Reichelt were found guilty on 7 July 2011 at Southampton Crown Court. Nathan was sentenced to four years and five months in prison and disqualified from acting as a director for 15 years.

Reichelt was sentenced to three years and nine months in jail and disqualified from being a director for 10 years.

The jury failed to agree a verdict on Gibbs at the original trial but before his re-trial he admitted his guilt and was sentenced today (26 October 2012) to a one year suspended jail sentence. He was also given a six month supervision order, 200 hours community service and disqualified from becoming a director for 10 years.

Reporting restrictions were in place until sentencing.