Vantis convict ordered to repay £810,000

David Perrin, a former deputy managing director at Vantis Tax, has been ordered to pay back £809,692 or face a further three years in prison.

A judge at Blackfriars Crown Court has given Perrin six months to pay the money back.

In February last year the accountant was sentenced to 18 months in prison for running a £70m tax scam at Vantis. The fraud generated profits of more than £4.5m for him and his boss Roy Faichney, managing director of Vantis Tax.

Perrin’s 18 month prison sentence was...

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Comments

Funny how ...    5 thanks

JC | | Permalink

Everyone is in 'rude' health until they are caught - then health becomes a trump card to avoid sentencing

Seem to recall the same of Ernest Saunders a few years back with 'pre-senile dementia' (isn't that latent in everyone?).

Naturally once released from prison after only 10 months there was a miraculous recovery and he subsequently carried on working as a consultant

ShirleyM's picture

I wonder ....    2 thanks

ShirleyM | | Permalink

... what happened to the £4.5m profits, which were (I guess) proceeds of crime!

It leaves lots left over (or already spent) even after payment of the £810k.

davidwinch's picture

The benefit figure    3 thanks

davidwinch | | Permalink

According to a press report of prosecution evidence at the time of the trial:

Robert "Roy" Faichney and David Perrin, alongside their wives Shirley Faichney and Nicola Perrin, manufactured a series of bogus documents to allow the payment of huge sums from the companies involved in the scheme to a Jersey trust, it was alleged.

 

The prosecution argued that the trust did not exist, and that the money went directly into Nicola Perrin's Jersey bank account. She then allegedly distributed the cash equally to accounts held by the Perrins and the Faichneys. The two families spent the money on holidays, properties in Norfolk, Edinburgh and Jersey, and a Porsche Cayenne for a Vantis employee who had been involved in setting up the tax avoidance scheme, it was alleged.

In total the four extracted almost £5m, spending £2.75m, with £10,000 alleged to have been spent by the Faichneys on their silver wedding celebrations.

I do not have any knowledge of the case beyond what I have read in the media.  However from my knowledge of confiscations generally I can say that in confiscation law monies obtained jointly are deemed to be wholly obtained by each person involved.

So my guess is that the £4.5m figure is based on the total credited to Nicola Perrin's Jersey bank account without any reduction to reflect the subsequent distribution of those monies either to the Faichneys or in the purchase of a car for a Vantis employee.

The figure of £809,692 which Mr Perrin is now ordered to pay would be intended to financially wipe him out (based on his current financial position). 

This is in one sense a 'life sentence' since if Mr Perrin acquires further assets in later life (whether legitimately or illegitimately) the prosecution can go back to court for a further payment from him - until he has paid the full £4.5m 'benefit' figure.

David

ShirleyM's picture

Thanks, David    1 thanks

ShirleyM | | Permalink

I am pleased to see that, in this instance, crime didn't pay. :)

Very clear succinct explanation ...    1 thanks

JC | | Permalink

@davidwinch

I am sure there is a very good reason that I clearly don’t understand but … why is the figure limited to £800k and not the full amount.

In fact to go one step further why not add a 100% penalty fine (as a general rule) because otherwise all that is being repaid are the proceeds of crime and whilst a prison sentence may be appropriate there is no additional financial penalty; so ultimately prison could be served and maybe the guilty party could end up in 'profit' after the event!

Furthermore, it would seem that under the existing arrangement ‘..the prosecution can go back to court for a further payment from him - until he has paid the full £4.5m 'benefit' figure ..’ there could potentially be many bites of the cherry before actually recovering all the money. Whereas, if the amount order to pay in the first instance was £4.5m then the prosecution costs would be kept down and there would be a residual debt permanently in operation until paid off

Or is to do with him making himself bankrupt, thereby avoiding the greater sum?

so what

The Black Knight | | Permalink

Is the additional sentence halved for real time inside purposes too?

so he lived the life of riley, nice porsche, women and wine for a number of years in exchange for  free board and lodging at her majesties pleasure detox facility for a year and a half?

Where do I sign up?

davidwinch's picture

Half time    1 thanks

davidwinch | | Permalink

The Black Knight wrote:

Is the additional sentence halved for real time inside purposes too?

so he lived the life of riley, nice porsche, women and wine for a number of years in exchange for  free board and lodging at her majesties pleasure detox facility for a year and a half?

Where do I sign up?

Yes, the additional sentence (if imposed) would be subject to ROTL (release on temporary licence) at the half way stage - meaning the second half is 'served' outside prison.

However it is not subject to HDC (home detention curfew) - meaning there is no release from prison on an electronic tag prior to reaching the half way point.

However the imprisonment (if imposed) would be, in effect, for failure to pay the confiscation order amount on time. The imprisonment is therefore IN ADDITION to the confiscation order - not instead of it. The amount ordered to be paid remains due and it is open to the authorities to collect it by, for example, having the court appoint a receiver to take possession of, and sell, assets (including properties) owned by the convicted defendant.

That can get a bit messy where, for example, the defendant owns the matrimonial home jointly with his spouse. Should the couple get divorced you can then have a tangle of almost competing litigation in the criminal and matrimonial courts over who gets what!

David

davidwinch's picture

Punishment & confiscation    4 thanks

davidwinch | | Permalink

JC wrote:

@davidwinch

I am sure there is a very good reason that I clearly don’t understand but … why is the figure limited to £800k and not the full amount.

In fact to go one step further why not add a 100% penalty fine (as a general rule) because otherwise all that is being repaid are the proceeds of crime and whilst a prison sentence may be appropriate there is no additional financial penalty; so ultimately prison could be served and maybe the guilty party could end up in 'profit' after the event!

Furthermore, it would seem that under the existing arrangement ‘..the prosecution can go back to court for a further payment from him - until he has paid the full £4.5m 'benefit' figure ..’ there could potentially be many bites of the cherry before actually recovering all the money. Whereas, if the amount order to pay in the first instance was £4.5m then the prosecution costs would be kept down and there would be a residual debt permanently in operation until paid off

Or is to do with him making himself bankrupt, thereby avoiding the greater sum?

I fear you may gain the impression from this response that I spend too much of my waking hours with lawyers, but here goes!

Confiscation is not intended to be a "punishment" - it is intended to strip the convicted defendant of all the fruits of all his criminal conduct (not limited to criminal conduct of which he has been convicted).

But it is intended to be a "deterrent penalty". The distinction between a "punishment" and a "deterrent penalty" may not be intuitively obvious to you (or me) but I am informed that the clever lawyers understand this!

If the convicted defendant is ordered to pay more in confiscation than his "available amount" then he is very likely to incur further prison time. But that would make the confiscation order a "punishment" - which it is not.

So in confiscation proceedings the court determines two figures (1) the 'benefit' and (2) the 'available amount'. Neither of these expressions mean what they say. They are technical terms defined in the legislation. For example the 'available amount' is, broadly speaking, the defendant's gross assets less his SECURED liabilities, plus the add back of any 'tainted gifts' he has made.

It would appear from the press reports that in Mr Perrin's case the court determined his 'benefit' to be £4.5m and his 'available amount' to be £810,000 (approximately).

A convicted defendant is then ordered to pay an amount equal to whichever of these figures is the lower, initially within not more than 6 months. If he fails to pay then (usually) he will apply for further time to pay and the court can allow an additional period of a further 6 months (but no longer).

If he still fails to pay then interest starts running (at 8% per annum) and he is at risk of the default sentence (which is related to the amount ordered to be paid) being imposed.

So adding a further amount - you suggested a 100% uplift - would definitely be a "punishment" which is a No No. (The "punishment" is the original sentence of imprisonment handed down at the end of the trial.)

Going bankrupt wouldn't sidestep the confiscation - the legislators thought of that and there are what you might call anti- avoidance provisions in PoCA 2002. In effect the confiscation order is a 'life sentence' as far as acquiring assets is concerned!

I hope that clears a few things up.

David

Very clear and concise ...

JC | | Permalink

@davidwinch

Think I agree with you about clarity over '.. The distinction between a "punishment" and a "deterrent penalty" ..' being rather too obscure for the man in the street.

I have always believed/understood that one of the primary guidelines when drawing up these things is for them to be comprehensible by the 'ordinary man' without the need for specialist knowledge.

Once one gets into the realms of 'clever lawyers' then one has clearly moved away from this concept and entered a whole different ball game, where the general populace could be disadvantaged by legal obfuscation rendering clarity redundant

Anyway thank you for your excellent response

davidwinch's picture

The problem with "punishment"    1 thanks

davidwinch | | Permalink

In confiscation a defendant may be found to have obtained an assumed benefit in relation to a crime of which he has not been charged or convicted. Indeed the assumed benefit may not relate to any identifiable crime.

In English law we do not "punish" a defendant for a crime of which he has not been convicted. However we have no problem in rendering a "deterrent penalty" without conviction.

Hence the need for the clever lawyers' distinction!

David

Participators.....    1 thanks

AndyC555 | | Permalink

I'm still wondering at the conversation that must have taken place between those who sold the scheme and those who bought it....I suppose it might have gone like this.....

 

Perrin - You buy these shares, they shoot up in value then you donate them to charity.

Punter -  Why don't I just keep these incredible investments?

Perrin - Well.....er.....the charity benefits and you get tax relief...

Punter - Why don't I sell these incredible investments, donate part of the proceeds to charity, pay some tax and STILL be better off than I would be by just getting tax relief on the donation?

Perrin - Well.....er......

 

My point being it defies belief that the punter can't have known or worked out that the thing was a scam....who was advising them?

 

AndyC 

 

 

participators ..    1 thanks

Ian McTernan CTA | | Permalink

As you might have noticed, many people are scammed all the time, and a lot never realise anything is wrong until there is a knock on the door.

The 'punters' may have been told little or nothing about the actual workings of the scheme, in fact many would have left it to their advisors to deal with their affairs.

More likely the conversation was:

Advisor: There is a scheme available that will give us 100% tax relief on that income.  Don't know the details but these guys running it are well known in the field and respected.

Punter: Sounds good, how much does it cost?

Advisor: 20% of the tax saved.

Punter: Go for it

 

And that is all the average 'punter' wants to know, and indeed in many cases all the advisor wants to know, especially when the scheme sellers wave 'council's opinion' around too.

Don't blame the punters, they generally have no interest in the workings of the scheme and won't understand it even if you tried explaining it to them- much as you (probably) wouldn't be much good in a production of MacBeth at the Apollo in front of 4,000 people.  Horses for courses.

Re: Participators    1 thanks

jonbryce | | Permalink

Usually they don't explain how the scheme works, because they don't want other people to copy it, and they don't want HMRC to find out until the latest possible moment so they can't legislate against it in time.

Participators...

AndyC555 | | Permalink

Which is why I also referred to the advisors of the punters.

what were THEY thinking?

 

AndyC

 

(my production of "Journey's End" was actually well received.  Albeit in front of less than 400 people spread over 3 nights in a village hall.)

right but

The Black Knight | | Permalink

AndyC555 wrote:

My point being it defies belief that the punter can't have known or worked out that the thing was a scam....who was advising them?

 

AndyC 

A top accountancy firm!!!

Reasonable care? Most certainly? Penalties £NIL

"is this legal" "yes" "o.k then"

Where was the risk? No down side for the punter?

Deterrent Penalty and Punishment

samuelnagadesi | | Permalink

Dear David

Lots of thanks for making me to understand the silver lining between deterrent penalty and punishment. Even the confiscation of available amount cannot be treated as a deterrent penalty because after all what is left only the available amount after secured creditors. But, punishment  of person certainly deters the actions of the human beings. Hence proportionate punishment to the economic crimes i.e., the most serious of the crimes will be an appropriate deterrent. Any way thank you once again.

open prison

The Black Knight | | Permalink

Will these sentences be carried out in an open prison?

And what is difference as I have heard rumours you are allowed out for lunch and weekends.

So it rather defeats the object?

Wasn't it a missing trader fraudster that went out for lunch and never came back after stealing £38million....wonder if the law ever caught up with him?

davidwinch's picture

Gradual release

davidwinch | | Permalink

As you may know there are various categories of prisoner and categories of prison.

It is generally the case that initially on sentence a prisoner is held in a secure prison whilst being categorised (in effect evaluated) for a week or two and then transferred to an appropriate category of prison.

Obviously a person convicted of violent crime, or one with a history of bad behaviour or of escape attempts, or one with a very long sentence (10 years or more) is likely to be categorised as needing a higher security prison than, say, a former MP imprisoned on a relatively short sentence for financial crime.

It is also the case that any prisoner serving a sentence of years is likely to graduate through the system to less secure prisons as his or her sentence progresses.

In (almost) all cases release on licence is to be expected at the half way stage of the sentence and prior to that a prisoner may be out of prison on home visits or for longer periods on a 'tag', which is known as Home Detention Curfew.

The hope is that the prisoner will re-integrate into legitimate society.

It is also the case that some prisons have attractive gardens and open spaces where, say, the prisoner's wife and children can visit him and share a walk and an ice cream.

One does feel, as a visitor, that it is more difficult to get into some prisons than get out of them!

I well remember interviewing a prisoner about his financial affairs in relation to a forthcoming confiscation hearing.  At the end of the interview the prisoner said, "David, could I ask a favour?  When you leave could you give me a lift to the railway station?".  I was a little taken aback - as he could see.  "Oh, it's alright," he said, "I am working outside prison today and I shall be late for work as I have stayed here to meet with you".

I did give him a lift - and it was all alright!

But ultimately a prisoner's life is not his own.  He cannot go where he wants, meet with whom he wants, make phone calls whenever he wants, choose with whom he shares his accommodation, or even where in the country he lives.  That does have a significant impact even though he may be reasonably well fed, warm, and able to watch TV.

Personally when I am in prison I am very glad to be just visiting.

David

Ernest Saunders

DNelson | | Permalink

JC is correct, but the time period quoted is wrong.  Ernest Saunders was working at Car Phone Warehouse (CPW) within a week of release from open prison, not 10 months. He was employed as a marketing expert.  My girlfriend of the time was working at CPW and was appointed to be his assistant.  She said he laughed at the way he, aided by some influential friends, had fooled the justice system.  Remember folks, crime doesn't pay.  What, do I hear cynical laughter ?