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Police AccountingWEB Apostle Accounting hit with £40K AML fine and fraud probe
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Apostle Accounting hit with £40k AML fine and fraud probe

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As four properties were searched as part of a fraud investigation into Apostle Accounting, it has also emerged that the firm at the centre of a tax rebate scandal received an unrelated £40,000 fine for anti-money laundering non-compliance.

22nd May 2024
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A fraud investigation, the founder excluded from their professional body, breaches in anti-money laundering regulations and over £300,000 in liabilities owed to a number of creditors are the latest developments to come to light this past week against Apostle Accounting, which went into liquidation in October last year

AccountingWEB can reveal that £40,000 of the outstanding liabilities is due to a disciplinary from the Institute of Certified Bookkeepers (ICB), where the firm breached anti-money laundering regulations.  

The £300,000 owed in liabilities came to light after the liquidator filed a statement of affairs at Companies House. 

The firm has faced scrutiny after being the subject of a BBC ‘Rip Off Britain’ report in October last year, which uncovered allegations of the firm making bogus work expense refund claims. 

Police probes

The Suffolk-based firm is also back in the news after police carried out a series of pre-planned warrants on Tuesday relating to Apostle Accounting. The police searched four addresses and seized documents and digital devices, but no arrests were made and enquiries are ongoing. 

Al Al-Bassum from the Eastern Region Special Operations Unit (ERSOU) confirmed that the searches were part of an investigation into reports of potential fraud involving a Stowmarket-based business.

The police revealed that around 300 potential victims had been previously contacted by ERSOU officers in relation to the operation.

"Our teams are working closely with partner agencies to establish if any offences have been committed, and we would encourage anyone who thinks they may be a victim of fraud to report it," said Al-Bassum. 

The police probes come only days after the firm’s statement of affairs as of 3 April was filed on Companies House on 9 May, revealing some large liabilities in excess of assets.

Liabilities in excess of assets

The firm, founded by Zoe Goodchild in 2012 and controlled with her former partner Martin Goodchild, went into voluntary liquidation on 10 October 2023. 

Shortly after the firm’s accounts to 31 October and a declaration of solvency was filed on 27 October, showing assets comfortably in excess of liabilities. 

However, the Statement of Affairs, filed by the liquidator, showed a slightly different picture with the liabilities now showing in excess of assets. 

These liabilities included £202,753.84 owed to HMRC, £26,042 to Santander and £40,207 owed to the Institute of Certified Bookkeepers (ICB). The estimated amount owed to the five creditors listed comes to £315,408.65. 

Garry Carter, the director of compliance at the ICB, confirmed to AccountingWEB that the £40,000 owed to the ICB is a result of a disciplinary sanction against Apostle Accounting. 

The sanction is unrelated to the police investigation and relates to a failure to adhere to the anti-money laundering regulations due to a lack of due diligence on a lot of clients. The disciplinary came about before news emerged of the BBC Rip-off Britain investigation into Apostle Accounting.

The ICB stressed that £40,000 is an unusually high fine. 

Goodchild has been excluded from ICB and her licence in the name of Apostle was revoked. Apostle Accounting has since gone into liquidation and she is operating another accountancy firm called Innovate Accountancy Ltd.

However, Goodchild resigned as the person of significant control of the firm on 22 May 2024. She is still still listed on Companies House as a director of the firm. 

Allegations against Apostle

Hundreds of taxpayers have been left to pay penalties totalling an estimated £1.8m as a result of the Suffolk-based firm allegedly submitting incorrect self assessment repayment claims for employment expenses. 

Lee Osborne, a former client of Apostle Accounting, who shared his story with BBC’s Rip Off  Britain, claimed that he had to pay back £21,000 to HMRC, including the £8,000 deducted by Goodchild’s firm, compared to the £14,000 he originally received. 

'Witch hunt'

Apostle Accounting previously denied the tax rebate errors in statements from its lawyers, calling the claims “unfounded”. Goodchild also defended herself in a podcast two months ago, where she branded the allegations a “witch hunt” and accused former clients of being “hellbent on trying to ruin me”.

Discussing her entrepreneurial journey, Goodchild said: “I had some challenges over the last 12 months and these encompass false allegations harassment from some previous clients who were and still are, hell bent on trying to ruin me reputationally and mentally.

“They managed to get journalists involved, who as we all know, typically prefer to sensationalise stories that sell rather than reporting any actual facts. Despite the evidence presented to them, they prefer to continue what I can only liken to a witch hunt. 

“Now at the same time, within my business that this was happening, I was actually suffering from a marriage breakdown and subsequent separation. And I had to navigate my way into single parenthood of four children whilst simultaneously trying to support my team and clients and build my business.”

Then in another podcast, released a month ago, Goodchild said she’s closed a business that “I didn’t need to close, but I needed to close the chapter and put it behind me”.

[Ed: This article was updated on 23 May to include the news of Goodchild's cessation of significant control of Innovate Accountancy Ltd]

Replies (20)

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David Winch
By David Winch
22nd May 2024 07:55

In relation to the AML penalty I understand the ICB make no apologies for expecting their members to comply with the requirements of MLR 2017 - and for penalising those who it finds to be non-compliant. But I suspect the average penalty is a fraction of the size of the one in this case.
The moral of this part of the story for AWEB readers is 'Do pay attention to your AML compliance - preferably before your supervisory body contacts you to arrange a review!'.
David

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Replying to davidwinch:
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By GHarr497688
22nd May 2024 09:16

Can an individual Director of a insolvent company be accountable for the AML fines.
If not then the whole process is an "[***]". I did everything by the book when Goodchild was bending the rules , giving alleged poor advice etc . I decided to retire doe to stress imposed at an AML visit which was found to "no issues" whilst Goodchild sets up a new business and walks away ( at the moment ) scot free. What message does that send out to innocent people. Even if she was prosecuted which would cost the taxpayer a fortune she would end up in a Council House paid by the taxpayer with her Council Tax paid and a string of other benefits. Goodchild would not go to prison as this type of alleged crime does not warrant that. I rest my case.

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Replying to GHarr497688:
John Toon profile picture
By John Toon
22nd May 2024 09:30

Whilst accountancy continues to be deregulated this kind of thing will continue to happen. An ACCA qualified accountant close to me was kicked out a good few years ago and the practice they ran closed down. Days later they were a "consultant" at a brand new firm with no apparent partners. Personally I think this is shameful and there should be a zero tolerance approach to this kind of thing - if this happened in the legal, medical or other sectors that person would never work in that profession again

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Replying to davidwinch:
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By MikeyMad
22nd May 2024 09:50

if you look at the statement of affairs, you can see the individuals who have also put in claims against Apostle, of which some are in process with the small claims court, but these are the people who have the knowledge, time and resources to do something, many others have not, the amount of lives ruined by Apostle Accounting is in the 1000's, and the £/numbers in the media is understated as it was only Lee Osborne working it all out, HMRC, ERSOU and the liquidators will have all the actual numbers, but that will all come out eventually. but like many others have questioned, how is someone allowed to keep operating in the space after what has happened, and whenever someone tries to call the founders out on it, the comments are deleted and they are blocked.

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Replying to davidwinch:
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By FactChecker
22nd May 2024 14:25

I don't understand why the ICB (as far as I can tell from this article anyway) were solely focused on the firm breaching AML regulations?
What about poor standards of operations (let alone apparently of any semblance of integrity and honesty) that underpinned a model based on what sounds very like the fraud of which they've been accused?

If a restaurant was accused of systematically putting rat poison in customers' food, you might expect the focus to be on more than whether their certificates are correctly displayed!

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By Andy Hull
22nd May 2024 08:15

Out of their league, leave it to the Big Four

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Danny Kent
By Viciuno
22nd May 2024 09:18

What is wild about this is that she has opened another accounting practice!

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Replying to Viciuno:
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By lesley.barnes
22nd May 2024 09:52

Presumably being supervised by HMRC for AML I thought they wanted to drive up standards in the profession? That's even more bonkers!

I hope HMRC make a point of checking/enquiring into everything she submits with a finetooth comb.

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Replying to lesley.barnes:
David Winch
By David Winch
22nd May 2024 10:23

A couple of points about being supervised for AML by HMRC
1. The AML supervision team at HMRC fall within HMRC's Economic Crime Supervision, Fraud Investigation Service - you might think that it would be more natural for them to view supervision from a perspective of levying penalties for non-compliance, rather than guiding firms on how to improve their compliance
2. HMRC can and do refuse to register firms where they have reasonable grounds to suspect that a firm, if registered, would fail to comply with its obligations under MLR (and that includes where a firm has previously been penalised by a professional supervisory body). The effect of refusal to register is that the firm cannot continue to trade as an accountancy service provider/ trust and company services provider.
3. HMRC, when they do levy penalties, have fixed scales of penalty calculations which can produce eye-watering penalties and do routinely publish the names of firms penalised, the amount of the penalty and brief reasons for the penalty.
So I do not regard HMRC registration as a soft option for delinquent firms!
(And yes that is more than a couple of points, sorry.)
David
For completeness I should add that there is nothing to indicate that Ms Goodchild or Innovate Accountancy Ltd (of which she is a director) are supervised for AML by HMRC.

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Replying to davidwinch:
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By johnjenkins
22nd May 2024 14:47

You don't have to be regulated if you use client log in.
We've had this discussion before.

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By matthew pennifold
22nd May 2024 09:44

Where's the penalty in this?

"Hundreds of taxpayers have been left to pay penalties totalling an estimated £1.8m as a result of the Suffolk-based firm allegedly submitting incorrect self assessment repayment claims for employment expenses.

Lee Osborne, a former client of Apostle Accounting, who shared his story with BBC’s Rip Off Britain, claimed that he had to pay back £21,000 to HMRC, including the £8,000 deducted by Goodchild’s firm, compared to the £14,000 he originally received. "

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Replying to matthew pennifold:
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By MikeyMad
22nd May 2024 10:13

the numbers are outdated and understated, its much much higher.......

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By roger.meyts
22nd May 2024 11:09

If it's too good to be true ...

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By Paul Crowley
22nd May 2024 15:01

Looks like nothing much has happened to punish the wrongdoing, why bother to comply if this stuff goes nowhere?

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By sherodwilliams
22nd May 2024 16:37

It is interesting to compare & contrast what is reported about Apostle to the case of Lunn which was reported in Accountingweb through 2015 & 2016. The latter involved larger numbers but in reality what is commented upon in both cases is the sheer arrogance of the main protagonists. There is in both, a complete lack of professional integrity and ethical behaviour all in the name of fes to support a certain lifestyle. Whilst the late Austin Mitchell MP was often lampooned for his comments upon the failings of Self Regulation within the profession, these types of incidents continue to cast a shadow. There are of course sanctions which can be placed upon practitioners for what are flagrant breaches of codes on ethics& ICB will no doubt have more background on Apostle's behaviour in terms of the fine levied. My disappointment however is with HMRC because quite simply, they have the power I believe to withdraw 64-8 authorisations & refuse to deal with an agent. Given that HMRC stand to lose a significant sum in the liquidation perhaps that avenue will be looked into? If even only a quarter of what has reported contained an element of truth then Ms Goodchild should not be allowed to represent clients. As a rider to this, I was approached 20+ years ago by a prospective client who told me that he had appointed a local Chartered Accountant to act but was concerned with the advice received. The accountant was not listed as being registered with ICAEW but I phoned them to double check - same result. I said that in my mind it was outrageous that someone was passing themselves off as an ICAEW member & using that to gain public trust in his service. ICAEW told me that nothing could be done because the individual was " not a member" and it was a matter for trading standards. I pointed out at the time that if ICAEW was not concerned about their reputation then there was a major flaw. Nothing changes.

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Replying to sherodwilliams:
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By johnjenkins
22nd May 2024 16:53

HMRC can't be bothered to answer the phone so I doubt if most know what a 64-8 is.

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By sherodwilliams
22nd May 2024 16:59

That's about right !

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By Jabba the Hut
28th May 2024 11:28

I am just wondering why a client would be happy to agree to signing off a tax return with a £14k tax refund without questioning why. There is being a lay person and there is being a greedy idiot.

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By Jabba the Hut
28th May 2024 11:28

I am just wondering why a client would be happy to agree to signing off a tax return with a £14k tax refund without questioning why. There is being a lay person and there is being a greedy idiot.

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By MikeyMad
18th Jun 2024 17:10

it has been confirmed now that 4 addresses have been searched with a lot of material seized, and last week a man 41, and a woman 34 have been interviewed under caution by the police, investigation is ongoing

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