A former HM Revenue and Customs (HMRC) VAT inspector has been jailed for his role in a £171k tax fraud after a joint HMRC and National Crime Agency (NCA) investigation.
James McGee, 66, of Troon, South Ayrshire, was making bogus VAT repayment claims while using the hijacked identity of a dead man to cover up his fraud.
When arrested in 2013, McGee had two bank cards in the name of the deceased man. One of the accounts had been opened after the man died and the other had been credited with some of the fraudulently obtained money.
Officers searching McGee’s home seized handwritten paper records from his house which contained detailed information on several VAT registered businesses.
Experts confirmed the handwritten records matched McGee’s entries in his old HMRC diaries and notebooks.
McGee, who left his VAT compliance role with HMRC in 2009, has been sentenced to 30 months in jail after being found guilty following trial at Ayr Sheriff Court yesterday
Lynsey Thompson, Operational Lead, Fraud Investigation Service, HMRC, said: “McGee used his knowledge of the VAT system to coordinate a scheme to steal from the public purse – money that is essential to fund the services we need, such as hospitals and schools.
“This was a shameful way for a former employee of 34 years to act, but this conviction shows that nobody is above the law.
“I urge anyone with information about any type of tax fraud to report it on gov.uk.”
Rob Miles, NCA Scotland Operations Manager, said: “NCA investigators worked closely with our colleagues at HMRC to capture the evidence that was key to bringing McGee to justice.
“He used his experience and knowledge of the system to further his offending and probably thought this would help him evade detection.
“We’re working with law enforcement partners across Scotland to prevent organised criminality and we’re determined to tackle fraud in all its forms.”
Laura Buchan, Procurator Fiscal for Specialist Casework, said: “James McGee and his associates used their knowledge of the system to steal significant sums and then tried to cover their tracks by laundering the money.
“The multiagency investigation into their actions was long running and complex. This sentencing brings that difficult work to a conclusion and is testament to the partnership working between COPFS, HMRC and the NCA.”
McGee was initially arrested as part of a NCA investigation into identity fraud, of which he was cleared of any wrongdoing. It was during a search of his property following arrest that officers recovered documents suggesting he was involved in VAT fraud, triggering the HMRC enquiry.
During interview, McGee insisted he was not responsible for any criminality, but he did admit using the hijacked identity when calling HMRC’s VAT helpline.
McGee, who used to work from HMRC’s Ayr and Paisley offices, insisted the individual whose identity he used was the real controlling mind behind the criminal scheme. In reality, McGee, with the help of others, was central to the fraud. The group fraudulently obtained money from HMRC, with the proceeds being laundered through accounts controlled by McGee and the others.
In total, £101,443.14 was paid out due to the false VAT repayment claims, while a further £70,351 was withheld by HMRC. The others involved in the fraud were:
- Mark Dryden, 37, of Riverview Gardens, Glasgow
- Carly McGinley, 33, of Braes Avenue, Clydebank
- Gary Prentice, 36, of Bouverie Street, Glasgow
- All were sentenced at Ayr Sheriff Court on 7 February 2022. Dryden was jailed for 10 months and Prentice was ordered to complete 300 hours of unpaid work within 24 months and is subject of a Restriction of Liberty Order for four months. McGinley was fined £1,120.