Fraudsters jailed for £29m research and development tax relief claim
Three men involved in a fraudulent £29.5m claim for tax relief on a bogus IT project have been jailed for a total of 21 years.
Matthew Sutherland, 44, of Leamington Spa, Mohammed Zeb Zaheer, 37, and Mohammed Iqbal Khan, 53, both of Coventry, were prosecuted for Research and Development (R&D) tax relief fraud.
Sutherland was the architect of the crime and used his company, Convergica (Clinical Information Systems), to claim tax relief of £29.5m against a purported £137m spend on developing an IT healthcare system for two countries in the Middle East.
Zaheer and Khan were the frontmen for companies used to carry out the fraud, which came to light when HM Revenue and Customs (HMRC) requested supporting documents for the claim.
A falsified bank statement was submitted in January 2016, prompting an investigation. Sutherland and Khan were arrested. All three men were charged with fraud in March 2018.
Kath Doyle, deputy director, fraud investigation service, HMRC, said: “These men tried to extract an astronomical sum of money by claiming tax relief from a scheme designed to help legitimate companies do work that seeks to make advances in science and technology.
“This wasn’t research and development, it was out and out fraud. HMRC will continue to create a level playing field for law abiding businesses by rooting out the minority who seek to abuse these schemes, as this result clearly shows.
“Anyone with information about any type of tax fraud can report it to HMRC online or call our Fraud Hotline on 0800 788 887.”
Convergica claimed to have outsourced the programming work for the IT system to Mediatronix, a company controlled by Khan, which was purportedly paid more than £137m by Everbright Financial XII, controlled by Zaheer, on Convergica’s behalf.
However, this payment was not made and the claim for R&D – a form of tax relief for capital expenditure on research and development projects – was fraudulent. The £29.5m claim was not paid out by HMRC.
The men pleaded not guilty to conspiracy to cheat the public revenue at Birmingham Crown Court on 12 September 2018. They were found guilty at the same court on 26 February after an eleven week trial.
At Birmingham Crown Court on Thursday (November 26), Sutherland was jailed for nine years, Khan was jailed for seven years and Zaheer was jailed for five years. Sutherland was jailed in his absence as he is in Dubai and is too ill to travel.