11-year ban for former Widnes director
A LIVERPOOL businessman and former director of Widnes Rugby League Football Club, has been banned from holding company office for 11 years.
Stephen Vaughan, who also owned Chester CIty FC before its recent administration, has signed a Disqualification Undertaking relating to his involvement in an alleged VAT fraud.
The ban follows an investigation by the Insolvency Service into his conduct while a director of the club.
Widnes RLFC entered into administration in October 2007 with debts of more than £1.6m.
The signed undertaking contained details of alleged ‘carousel fraud’ carried out by Mr Vaughan, designed to prop up the finances of the club, which was technically insolvent at the time.
Mr Vaughan arranged for the club to ‘purchase’ three consignments of clothing for £2.8m from a UK company, and on the same day ‘sold’ the clothing to a company based in Spain. The transactions appeared to be part of a linked series of purchases between the UK and Europe.
Mr Vaughan then attempted to reclaim VAT for the club, however HMRC refused the repayment of the club’s VAT claim on these transactions.
Payment for the goods was made via the First Curacao International Bank, based in the Dutch Antilles.
The bank was closed down by banking authorities when it was discovered that it provided banking facilities to a significant number of companies involved in carousel VAT fraud.
The Disqualification Undertaking states that: Mr Vaughan caused Widnes Rugby League Football Club Limited to purchase clothing from a UK company, in three transactions worth a total of £2,877,228 plus VAT of £505,265.
The clothing goods were sold on the same days of purchase to a Spanish company for a total of £3,002,855. The three transactions took place in June, 2006.
These transactions were carried out in a manner which involved Widnes Rugby League Club in Missing Trader Intra Community (MITC) VAT fraud, also known as ‘carousel fraud.’
He caused these transactions to take place when he knew the club was insolvent.
Payment for the goods purchased was not made to the alleged supplier, but was instead made into a third party’s bank account in the Netherland Antilles.
He failed to inform the other directors of Widnes Rugby League Club of these transactions.
He also failed to disclose to other directors a loan of £392,000 made to the club in August 2006.
The Official Receiver of the Service’s Public Interest Unit in Manchester, Ken Beasley, said: “Carousel VAT fraud is a serious offence which deprives the UK of billions of pounds of tax revenue each year, and the Insolvency Service will investigate any director of a company involved in such actions.
“In the last financial year the Insolvency Service’s Public Interest Unit disqualified 89 former directors whose companies were involved in carousel fraud, with the average period of disqualification lasting 12.5 years.”
Mr Vaughan’s disqualification takes effect on November 25. The disqualification means he will be banned from acting as a company director, or in any way controlling a company, until 24 November 2020.
If he breaches the undertaking he may be prosecuted.
