An experienced FD has been jailed for five-and-a-half years for a hare-brained scheme involving Brazil’s Amazon rainforest, a fake cure for the HIV virus and a world-renowned conservationist.
No, it’s not a Coen Brothers’ plot. John Banyard was finance director for the rather inappropriately named Ethical Trading and Marketing company. The company claimed to invest in HIV research and tree replanting in the Amazon.
The company, however, was a tax grift. Alongside Antony Blakey, Ethical’s director, Banyard enticed wealthy investors with the promise of avoiding tax by supporting the good causes. Banyard and Blakey sold the scheme as a marketed investment opportunity.
Investors were able to claim tax rebates on the losses that the businesses apparently generated, or lower their tax bills, by offsetting losses against £160m of income, attempting to avoid £60m in tax. The majority of repayments claimed were withheld by HMRC.
And there’s another curious twist in the story: the two men were aided and abetted by Prof Ian Swingland, a world-renowned conservationist. Swingland helped create fake documents to add credibility to the scheme.
The scheme was actually scuppered last year and all the men involved sentenced. But details can only now be revealed after reporting restrictions were lifted last week.
An investigation found the men created false documents to fraudulently claim expenses. They submitted fake scientific reports to HMRC and photos to support their claims but there was no evidence any of this had actually taken place.
The tax authority’s investigation was a winding, multinational effort as it attempted to trace Banyard and Blakey’s convoluted plot. HMRC worked with a number of foreign jurisdictions including Germany, Mauritius, Brazil, the Netherlands, France, Cyprus and the United States. The investigation uncovered offshore companies in Mauritius and the Seychelles.
Simon York, director of HMRC’s fraud investigation service, said the men had “no shame in using a worthy cause like HIV research to mask their criminality”.
The men were found guilty on 3 March 2017 after a trial at Southwark Crown Court that began in September 2016. In addition to Banyard’s five-and-a-half year sentence, Blakey was jailed for nine years. Ian Swingland received a two-year sentence, suspended for 18 months.
HMRC is pursuing confiscation against the fraudsters to recover criminal proceeds and also pursuing those who invested in this now failed avoidance scheme to recover taxes due. Over and above the fraud, Banyard and Blakey both pleaded guilty to income tax evasion, with Banyard also admitting a charge of facilitating tax evasion.