A film producer and former partner at accountancy giant Ernst & Young has been jailed for eight years after attempting to steal £2.2m in a tax fraud linked to the film industry.
Terence Potter, 55, sold a number of fraudulent schemes to wealthy professionals which he said exploited legal loopholes to avoid paying tax, a court heard.
Potter is the brains behind Cardiff’s Aquarius Films – which is responsible for a host of British films and holds distribution rights to the 1999 blockbuster Three Kings.
He set up partnerships which claimed to have spent £5.7m on two movie projects, creating artificial losses to allow investors to claim back pay-as-you-earn (PAYE) tax.
Financial adviser Neil Williams Denton, 42, was jailed for six years after he promoted the bogus schemes which were underpinned by false documents.
'A fictitious merry-go-round of false accounting'
Both men were found guilty following a trial at Southwark Crown Court in London.
Judge Martin Beddoe said the men were “deeply dishonest individuals” who were involved in a “fictitious merry-go-round of false accounting”.
“The purpose of these schemes was to line your pockets and provide a route to your clients to substantial tax relief,” he said.
“It was patently highly sophisticated offending.
“The Treasury had better things to be paying for than such dishonest claims. If successful it would have taken hundreds of thousands of pounds from the Exchequer.”
Addressing Potter, the judge said: “I conclude you are a calculative and manipulative individual.”
Williams Denton, of Bolton, gave a thumbs up to the public gallery as he was led from the dock, while Potter stared straight ahead as his sentence was delivered.
'Sophisticated offences'
The court heard Potter, who previously lived in South Wales before being based in Monaco, set up two partnerships to produce a documentary on celebrity culture called Starsuckers and another film titled Mercedes The Movie.
The partnerships and their investors declared the losses in their tax returns, allowing them to recoup up to £40,000 in tax relief for every £20,000 they had invested.
The majority of the tax refunds were withheld by HMRC and although £500,000 was paid out initially, the money has since been recouped.
Three investment bankers, James Hyde, Phillip Jenkins and Hamish MacLellan, have previously been jailed for taking part in the fraud.
Prosecutor Shane Collery said: “They were all working in high-pressure jobs. They were bankers not film-makers.
“These were sophisticated offences involving significant planning.”
Jennie Granger, director general of enforcement and compliance at HMRC, said: “This was pure greed by a dishonest tax agent, a financial adviser, and people who were already wealthy individuals.
“Those found guilty believed they were above the law, cheating the system by masking tax fraud as investment in films.”
In a statement after the hearing, Paul Schofield, a solicitor for Williams Denton, said: “My client strongly maintains his innocence and we have already started the process of appealing against the convictions and sentence.”
see- http://www.walesonline.co.uk/news/wales-news/deeply-dishonest-film-producer-jailed-10624284
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