A Solihull man who conned UK tax officials out of £34 million has been jailed for 17 years – one of the longest sentences in British criminal history for fraud – it has been revealed today.
Thomas Scragg, from Hockley Heath, was jailed for a total of 17 years following three separate fraud convictions against HM Revenue & Customs (HMRC) – the latest, in March 2011, for stealing millions of pounds in employee PAYE tax following a joint investigation by West Midlands Police and HMRC.
The extent of Scragg’s racket has remained a secret until now as cases against his two henchmen – Carl and Anthony Johnson from Wolverhampton – progressed through Court.
But the brothers’ convictions today (9 July) for money laundering Scragg’s ill-gotten gains has now lifted reporting restrictions and the lid on the 56 year old’s criminal empire.
Scragg used his business “Moya Payroll” – which managed staff wages of construction industry companies – to steal over £26m in tax over a five year period between 2002 and 2007. His co-defendant, Paul Phillips, from Derbyshire, was jailed for nine years.
A further investigation by West Midlands Police uncovered a further £8m of stolen PAYE tax in a 10 month period from April 2007 to February 2008.
Birmingham Crown Court heard how Carl (49) and Anthony (51) lived extravagant lifestyles using money they received from Scragg in return for their “protection services”.
In total he paid the brothers – who had a string of convictions for violence and witness intimidation – around £2.4m.
All three men spent hundreds of thousands of pounds on luxury hotels in London and regularly ran up massive bills in local restaurants.
The notorious Johnson brothers kitted out their homes with state of the art security equipment: Carl had bulletproof glass put in his Bushbury Road home, while Anthony rebuilt his house in Sandy Lane, installing a cinema room and dog kennels.
They drove around in expensive cars including a Lamborghini Murcielago, Bentley Continental, Porsche Cayenne and Ferrari Spider.
Both brothers claimed their wealth came from running a legitimate security business – called Unit 11 – but the company paid nothing in tax to HMRC.
During the investigation all their accounts were frozen and managed by the police – action which had a dramatic impact on their lifestyles.
Restrictions were placed on their financial transactions and their assets, including properties worth more than £2 million, are now the subject of confiscation proceedings.
The investigation into Scragg’s empire also led to the convictions of co-conspirators who helped him carry out the fraud. The court heard how the men – some of them industry accredited accountants and auditors – helped Scragg execute the scam and launder his cash in such a way as not to raise the suspicion of the authorities.
The audacity of the fraud intensified after Scragg’s arrest when three of his associates tried to deceive auditors who were appointed by the court to restrict his finances.
Mark Harris, Mark Kenny and Sital Sheamar were all charged with Conspiracy to Defraud, Conspiracy to Pervert the Court of Justice and Money Laundering after they illegally tried to release the equity in Scragg’s fraudulent company.
All three were jailed in March this year following an investigation by the Regional Asset Recovery Team (RART), which is now conducting a financial investigation to identify how much those involved in the scam pocketed as a result of their criminal activity.
Detective Chief Inspector Shaun Edwards from West Midlands police said: “This was an incredibly long and complex investigation using the combined specialist skills of officers from West Midlands Police, HMRC investigators, the Regional Organised Crime Unit (ROCU), Regional Asset Recovery Team (RART) and CPS Lawyers, who have worked extremely hard throughout the inquiry.
“This was fraud and money laundering on a massive scale; it deprived the public purse of millions of pounds and Scragg’s audacity is shown by the fact that he continued the fraud in various guises even after he knew he was being investigated.
“A number of my officers have devoted the last five and a half years to bringing these men to justice and I’m pleased that we can now tell the world about the extent of their crimes for the first time.
“Carl and Anthony Johnson flaunted their wealth for the local Wolverhampton community to see – which is what ultimately led to their downfall. It was the law-abiding citizens of the city who came to us demanding answers about how the Johnsons were increasing their wealth.
“They were once heard to joke ‘crime does pay’… they now have plenty of time behind bars to reconsider this opinion.
“I hope this sends out a very strong message that we will continue to work with other agencies to disrupt organised crime groups – no matter how long it takes – and that no one should regard themselves as ‘untouchable’.”
Simon De Kayne, Assistant Director of Criminal Investigation for HMRC, said: “This operation is as a result of strenuous efforts by our teams of officers, working closely with West Midlands police, to disrupt the sophisticated scams of organised crime gangs behind fraud and money laundering activities.
“The three conspiracies headed up by Scragg resulted in the theft of over £34 million from the public purse, depriving vital public services of much needed investment. We are committed to bringing them to justice and to deprive them of the proceeds of their crime.”
Head of the West Midlands Regional Asset Recovery Team, Detective Chris Berrow, said: “Many of us are aware of individuals who live lives of luxury without legitimate endeavour while most of us struggle.
“We will continue to use powers derived from the Proceeds of Crime Act to strip these criminals of their ill-gotten gains and ensure a just outcome.”
Source – West Midlands Police – Latest News – 16 July 2012