Umbrella bosses jailed for £45m PAYE swindle
The directors of an umbrella company who swindled £45million have been jailed for a total of almost three decades, in what is said to be the UK’s largest ever payroll fraud of its kind.
Geoffrey, Joshua and Andrew Copp pocketed VAT they were meant to pass on to HMRC, when the three were running Quality Premier Services (QPS), formerly Central Payroll Specialists.
As QPS, the trio -- from Essex -- told recruitment agencies who paid the VAT: “We believe that compliance and professionalism should lie at the heart of all business dealings.
“[But] the real value of our service comes from our extensive experience in the contracting sector, our forward thinking approach and our flexible attitude to processes and systems”.
For Joshua, that flexibility included storing on his phone an image of a notepad with sums of how the VAT fraud got worked out, before being split between him, his uncle and father.
The latter, Geoffrey, who police said set up the umbrella companies, used his share to buy racehorses and mansions, one in Spain and three in England, mortgage-free at a total cost of £3m.
Like his 24-year-old son, he paid no income tax from 2009 to 2015, although his brother Andrew, the director of the brolly while most of the VAT was stolen, paid £15,930.
But it was Joshua who first aroused suspicion, posing on Instagram with the Copp’s fleet of six supercars, including two Lamborghinis and a Bentley Continental.
Described by Essex police as having “very little experience” in business other than at the brolly, Joshua had £2.4m transferred to his personal bank account from CPS in 2013-14.
A further £9.2m was transferred to him from CPS and QPS during 2014-15, helping to explain the haul of ten luxury watches found when warrants were executed at his home.
Further investigations by Essex police and HMRC found that the two umbrella companies paid just under £4m in VAT between September 2012 and September 2015.
HMRC investigators estimate that there was just under £46m in unpaid VAT during the period. “They saw this money as a windfall to spend as they wished,” said Kent and Essex Serious Crime Directorate DCI Josie Hayes.
She added that despite the seriousness of the scam, and its sophistication, the Copss denied any knowledge that their companies owned such an enormous amount of VAT.
Former tax official Carolyn Walsh, who has run an umbrella company, said that fraud causes like the Copps’ were a reminder for agencies -- and temporary workers -- to “take care” in the sector.
“I've always thought it impossible that companies which charge £15-£30 per worker could pay huge kickbacks for referrals and offer 30 day credit terms without dipping into the VAT held on account, “ she said. “It seems that some of the cases coming to light are even worse than that.”
Appearing for sentencing at Wood Green Crown Court, Geoffrey was jailed for 10-and-a-half years; Joshua for eight years and Andrew for nine years.
Detective Chief Inspector Hayes said: “Essex Police will also begin the process of applying for confiscation orders under the Proceeds of Crime Act to recover the cash that should rightfully have gone into the public purse, ensuring they do not benefit from their criminality.
“We have already obtained a restraint order for property and money valued at £22million, which ‘freezes’ property that may be liable to confiscation following a trial and the making of a confiscation order.”
Since her comments, QPS has been placed into liquidation as a result of a HMRC winding up petition, followed by the liquidation of CPS. Officials said: “HMRC’s Criminal Taxes Unit is working closely with the liquidators in order to maximise recoveries for creditors.”