Following a 10-year investigation, HM Revenue & Customs (HMRC) secured convictions against a group of bankers, businessmen, a solicitor and an engineer who enticed people to invest in researching the best ways to regenerate forests in Brazil and China to aid the fight against global warming.
The investigation revealed the scheme was nothing more than a fraud based on a complex series of contrived bank and paper transactions. At around £107.9m ($142.3m, €122m), HMRC described the fraud as one of the UK’s biggest.
A statement from the Crown Prosecution confirmed: “Much of the structure was deliberately incorporated in offshore jurisdictions, such as the British Virgin Islands and the Island of Nevis, often through the agency of Panama-based Mossack Fonseca, with the intention of ensuring its secrecy.”
A total of 730 investors signed up to the scheme, induced by the offer of an immediate large return – a £20,000 investment would result in a successful claim for £32,000 in tax relief.
However, the group used the investors’ money to fund their lavish lifestyles, buying properties in the UK, Dubai and Australia, expensive jewellery and luxury holidays.
Contrived offshore structures
Simon York, director of fraud investigation service, HMRC said: “This was an audacious and cynical fraud on an astonishing scale, characterised by greed and a complete disregard for the ecological causes the perpetrators claimed to be supporting. Instead the group spent investors’ money on their own lavish lifestyles.
“These individuals thought they had worked out the perfect fraud. At every step they used contrived offshore structures, complex transactions and blatant lies in an attempt to hide their tracks and derail our criminal investigation.
“But the determination and professionalism of our teams has shown, yet again, that we will not hesitate to bring fraudsters to justice. Work has now begun to recover the proceeds of this crime in order to fund vital public services.”
Guilty
Michael Richards, the ringmaster and originator of the fraud, led the group to create and trade Carbon Emission Reduction Certificates, which help countries hit environmental emissions targets set by the United Nations.
He was assisted by entrepreneur Robert Gold of Dubai, described in court as Richards’ bulldog and negotiator who ensured the fraudulent deals actually took place. He diverted money from the scheme to purchase properties in the UK and Dubai for himself.
Rodney Whiston-Dew – a solicitor – set up the complex offshore structures to disguise the true nature of the fraud and hide the money, none of which was declared to HMRC.
The other group members found guilty at London’s Southwark Crown Court were environmentalist and business consultant Jonathan Anwyl and 78-year-old former music industry executive and ex-banker Evdoros Chrysanthos Demetriou.
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