Former Royal Bank of Scotland Group Plc and Jefferies Group LLC employees were among seven investment bankers charged with using a film-production scheme to avoid 2.5 million pounds ($4.1 million) in taxes, U.K. prosecutors said.
The charges against 13 people relate to two film partnerships that allegedly submitted false tax returns so its members could claim relief on losses. Three women and 10 men “conspired to cheat” Her Majesty’s Revenue and Customs through “a complex film scheme designed for that purpose,” the Crown Prosecution Service said in a statement today.
Assad Amin, Vincent Walsh and Jason Edinburgh all worked at RBS until 2012, according to the U.K. finance regulator’s register of people approved to work in the industry. Sarah Small, a spokeswoman for the Edinburgh-based lender, declined to comment.
Hamish Maclellan, who was the head of international equity sales at Jefferies, and former traders James Hyde and Phillip Jenkins were also charged. All three left the New York-based investment bank in 2012, according to the register. Sara-Louise Boyes, a spokeswoman for Jefferies, declined to comment. Maclellan didn’t return an e-mail seeking comment.
“This is another example of HMRC targeting sophisticated investors, which could have a massive impact on their careers if proven guilty,” said Tessa Lorimer, a tax lawyer at GSC Solicitors LLP, who isn’t involved in the case. “The total amount is relatively small, which will make quite a few people rather nervous if they have participated in similar schemes.”
British tax collectors are investigating whether film companies created movies that were intended to fail as a way to get illegal tax breaks. In August, prosecutors charged five people over a separate scheme that allegedly cost taxpayers about 125 million pounds. The plans have also been the subject of lawsuits by investors who say they lost money.
“The vast majority of people pay the tax they owe, but for those we suspect may not be, no matter who you are or what your profession, it’s only right we investigate,” Donald Toon, director of criminal investigation at HMRC, prosecutors said in the statement.
Terence Potter, Kimberley Murphy, Neil Williams-Denton, Elspeth Mundy, Christopher Atkins, Christine Slater and Michael Elsom were also charged at City of London Magistrates’ Court this afternoon. The defendants spoke only to confirm their names, addresses and ages, before the case was referred to Southwark Crown Court for a hearing on Feb. 13.
Prosecutors didn’t identify the employers of any of the accused.
“My client completely and utterly denies the charges brought,” said Paul Schofield, a lawyer for Williams-Denton. “He is shocked by this prosecution and will vigorously contest the case.”
Mundy’s lawyer, Adam Foster, said she denies wrongdoing and looks forward to setting the record straight. Atkins’s lawyer, Phil Smith, said his client “vehemently denies any wrongdoing” and “looks forward to the opportunity to clear his name in court.”
Lawyers for the other defendants didn’t immediately respond to requests for comment.
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