Fraudster hit with £2.4m confiscation order | AccountingWEB

Fraudster hit with £2.4m confiscation order

An accountant previously convicted of tax fraud has now had a confiscation order made against him for £2.46m, which if unpaid will result in a further eight years added on to his jail time.

Christos Charalambous, is currently serving an eight-year prison term after he was convicted in July 2010 of submitting more than 6,000 fraudulent Self Assessment tax returns on behalf of his clients. If he does not pay the money back within 10 months, he faces an extra eight years in jail.

The former chartered accountant, who was excluded from the ICAEW for failing to co-operate with the Inland Revenue in 2005, included fictitious expenses claims on the returns and never showed clients what information he had included.

Given recent conversations on confiscation orders, do members of this group have any views on how this case might relate to the wider profession? A case of just desserts, or might there be concerns about his tax liabilities being included within the criminal proceeds?

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davidwinch's picture


davidwinch | | Permalink

We don't have the full details of this case in the news reports.

We do know that the frauds commenced prior to 2003 and so the likelihood is that the confiscation proceedings were under the provisions of the Criminal Justice Act 1988 (as amended by the Proceeds of Crime Act 1995) and not under Proceeds of Crime Act 2002 provisions.

So the court will have come up with figures for (a) the defendant's 'benefit' (meaning the gross amount obtained by him in connection with the crime) and (b) the defendant's 'available amount' (meaning his current gross assets less secured liabilities).  The court will then have made a confiscation order in the amount of whichever of the two figures was the lower one.

If he fraudulently obtained and received a tax refund for a client and kept a proportion of that then the 'benefit' will be the amount which he fraudulently obtained (not simply the proportion which he retained as his fee).  So I would expect the benefit figure to be not less than the £11m paid out by HMRC.  The personal tax & VAT liabilities he evaded would be further benefit in addition to that.

My guess therefore is that the figure of £2.46m is the court's figure for his 'available amount'.  That may, or may not, include an estimated amount of 'hidden assets' (meaning assets he is thought to have but have not been found).

So, in effect, the order is intended to financially wipe him out.

Whether one should have any sympathy for him is another matter!  An accountant who commits tax fraud on a grand scale should not expect much sympathy from the court.


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Group: Money laundering and crime
A group for discussing issues relating to suspected money laundering and other crime