INCOME TAX CASES INVOLVE HUGE SUMS

Star (Christchurch), Issue 19268, 3 January 1931, Page 9

INCOME TAX CASES INVOLVE HUGE SUMS

FRAUDULENT CLAIMS BY ASSISTANT INSPECTOR. Remarkable stories of income-tax frauds are contained in the evidence, given before the Select Committee of Public Accounts in Britain last year. Two cases involving huge sums were described by Sir Ernest Gowers, Chairman of the Board of Inland Revenue. In the first case the amount of income which had escaped assessment was £857,000, and the duty owing was £364. 000. This was settled for £550,000 as duty* and penalties. In the second case the fraud amounted to £536,000 of income omitted to be returned and the liability was £381,000. The sum accepted in settlement was £500,000. Sir Ernest also related how former Assistant Inspector of Taxes, who va» now serving five years’ penal servitude obtained between September, 1925, and March, 1928, a sum of £6OOO by* means of fraudulent claims based on forged share certificates. Four and a half Tears' Career. This man carried on his practices for four and a half years, eighteen months of which were while he was still an assistant inspector, the rest of the time after he had been invalided out of the service with a pension of £62 a year. He went to twenty-five different districts and represented himself as nine different persons. In the man’s house were found: 42, 000 blank income-tax vouchers; seven books of “admirably printed share certificates” ; six common seals of six different companies; blank broker?’ accounts of a well-known firm; contract notes, “ .the objects of these being that if he was asked to produce a certificate of some holding of which he had not manufactured a certificate, he would produce a contract note for its sale.” Describing the means by which the man carried out hia frauds, Sir Ernest said: “ He came to the special commissioners’ office in January, 1928, and said he had just come back from abroad, and that he had an income of about £2OOO a year, and he was liable to supertax. He asked for the necessary forms, which were then given to him. He said he was going to live in Nottingham, and he was advised by the special commissioners that income tax repayments for the last six years seemed to be due to him. He then presented himself at Nottingham with income-tax vouchers covering income up to about £2OOO a year and made a claim for repayment.” Discovery of'Fraud. It was this claim which led to his exposure, the claims clerk noticing a discrepancy* which led to inquiries being made at one of the companies whose names he had used. “The company stated: ‘This voucher was never sent out by us.’ We had all his vouchers sent up to the companies from which they were said to have been sent out, and they were all pronounced to be false. Our detective officers trailed him to Liverpool, after passing another claim in the name of Boultbee. They trailed him to Birmingham, where they* ran into him.” The man obtained his certificates by going to the secretaries of companies and asking for blank certificates, “ in order to verify claims.” These secretaries knew him to be an assistant inspector, and the certificates were handed over without a word. He then got photographic copies made, and went to printers at Leighton Buzzard saying that he was acting either on behalf of printers in London or on behalf of the companies. Sir Malcom Ramsay, another of the witnesses, mentioned that one of the biggest cases of fraud went on lor eighteen years.