MR RICHARD STUART GEORGE

Disqualified from

2019-11-25

Date of birth on record

June 1946

1. Between 01 December 2012 and 24 July 2013 Richard Stuart George (‘Mr George’) caused Millennium Energy Trading Limited (‘MET’) to participate in transactions which were connected with the fraudulent evasion of VAT, such connections being something which Mr George either knew or should have known about. 2. On MET’s 02/13, 05/13 and 07/13 VAT returns, Mr George caused MET to wrongfully claim the sum of £4,890,631 from HM Revenue and Customs (“HMRC”). Annex 1 Mr George was aware, or ought to have been aware, that VAT fraud was rife in the wholesale trade of scrap metals in which MET engaged, because:<br>On 12 March 2007, long before MET’s metals trade began, HMRC wrote to MET alerting it to the risks of MTIC fraud in sectors in which it was then trading. That letter enclosed Notice 726 regarding joint and several liability for unpaid VAT.<br>On 7 July 2010 HMRC visited MET, and was told that the company intended to trade in carbon credits. MTIC fraud was discussed in detail at that meeting, with another copy of Notice 726 and other information on MTIC fraud was issued.<br>On 24 January 2013 HMRC visited MET and specifically warned about the risks of MTIC fraud in the metals trade and the need for robust due diligence.<br>On 25 January 2013 HMRC sent MET an ‘MTIC awareness letter” setting out indicators of VAT fraud and the need to verify trading partners in the sector.<br>On 22 March 2013 HMRC wrote to MET advising that the company was being included in the ‘continuous monitoring’ programme.<br>On 3 July 2013 HMRC wrote to MET notifying it that tax losses of over £4.1 million had been identified in MET’s supply chains. 2 The trading in which MET was involved had features which put, or should have put, Mr George on enquiry about the legitimacy thereof, as follows:<br>MET was continuously involved in deals that traced back to fraudulent tax losses. There comes a point when an innocent explanation for such a recurring outcome becomes implausible.<br>MET undertook back to back deals, meaning that the same amount of goods were bought as sold on. A trader would normally be expected to hold on to goods or source from different suppliers, the fact that MET never needed to do this is an indicator of contrivance and a common feature of MTIC fraud.<br>MET failed to enter into any formal written contracts. A trader undertaking genuine commercial deals on this scale would be expected to enter in to formal agreements in case of a dispute.<br>MET failed to take out insurance. A trader undertaking genuine commercial deals on this scale would be expected to purchase insurance in case the goods were lost, stolen or damaged. The fact that no insurance was in place indicates that MET was unconcerned about these possibilities. This may because MET knew the deals were all prearranged as part of a scheme to defraud HMRC. 3 Despite being aware of VAT fraud in MET’s trade sector and engaging in transactions bearing the features of such fraud, Mr George failed to ensure that MET carried out effective steps, checks and / or due diligence in respect of its trade and of its trading partners as follows:<br>Evidence presented to the Tribunal states that no diligence was carried out on a trader named UAA because the director of that company, Mr Adeyeri, was known to Mr George and Mr George carried out checks on MET’s other counterparties via the VIES system.<br>MET made no checks through HMRC’s validation system on any of its 3 suppliers or any of its 10 customers before July 2013.<br>MET conducted a VIES check on a company named Swat on 3 July 2013. This was after MET had begun trading with Swat, and even though the check failed to provide a positive validation of Swat’s VAT number, MET continued to trade with it. 4 The trading chains in which MET was involved caused significant losses to HMRC.<br>Every deal under consideration by HMRC has been traced back to identified tax losses in the appropriate VAT periods.<br>HMRC has claimed a total liability of £9,781,262 in VAT assessments and penalties as a direct result of MET’s participation in transactions connected with the fraudulent evasion of VAT in the 3 accounting periods ending 02/13, 05/13 and 07/13.