Case Studies

Film fraud in court

by Mark Rowe

A gang who made a film solely as a £2.8 million tax scam have been convicted in what is thought to be the first prosecution for film tax relief fraud.

HM Revenue and Customs (HMRC) found that the film, A Landscape of Lies, which it was claimed starred Hollywood A-list actors, was never intended for the big screen and was a sham production. The real intent was to defraud the public purse of nearly £1.5 million in VAT along with nearly £1.3 million in film tax credit claims.

Gang leader Bashar Al-Issa, 34, of Maida Vale, London, with Aoife Madden, of Northern Ireland, Tariq Hassan, of Essex, Ian Sherwood and Osama Al Baghdady, both of Manchester, owned Evolved Pictures. They told their auditors that they had a budget of over £19m provided by a Jordanian company to produce a blockbuster film in the UK.

Evolved Pictures told HMRC that millions of pounds of work had been spent on the film, including paying actors and film set managers, claiming this meant a VAT repayment was due of £1,488,187. However, during checks HMRC found that the work had not been done and most of the so-called suppliers and film studios had never heard of the gang. Furthermore, capitalising on a scheme designed to support genuine British film makers, Evolved made fraudulent tax credit claims of £256,385.50, while preparing to submit a further claim of £1,033,337.

However, after they were arrested, the gang came up with an elaborate plan to cover their tracks and hide the fraud by shooting a film on a shoestring called “A Landscape of Lies” featuring two television personalities.

John Pointing, Assistant Director of Criminal Investigation at HMRC, said after the case: “This gang thought they could exploit rules for genuine British filmmakers and thieve from the public purse for their own gain. They were wrong as HMRC will not stand by and let that happen.

“Falsely claiming VAT that is not due is illegal – so we are pleased that instead of this film flop going straight to DVD, these small-screen z-listers could go straight to jail.”

Sentencing will take place on 25 March 2013. Confiscation proceedings are under way.

Notes

Bashar Al-Issa, DOB 13/03/1978, of Maida Vale, London, was convicted on 12 March 2013 of two counts of conspiracy to cheating the public revenue, at Southwark Crown Court.

Aoife Madden, DOB 01/08/1981, of Northern Ireland, pleaded guilty was convicted of two counts of conspiracy to cheat the public revenue at Southwark Crown Court.

Tariq Hassan, DOB 18/09/1960, of Ilford, Essex, was convicted on 12 March 2013 of one count of conspiracy to cheat the public revenue, at Southwark Crown Court.

Ian Sherwood, DOB 21/07/1959, of Sale, Manchester, was convicted on 12 March 2013 of one count of conspiracy cheating the public revenue at Southwark Crown Court.

Osama Al Baghdady, DOB 01/02/1971, of Crumpsall, Manchester, was convicted on 12 March 2013 of one counts of conspiracy cheating the public revenue at Southwark Crown Court.

Film tax relief is administered by HMRC and is available to legitimate film makers for British films that are intended to be shown commercially in cinemas and of whose total production costs at least 25 per cent relates to activities in the UK.

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