A director of a fruit and vegetable company and his book-keeper, who attempted to claim more than £620,000 in VAT by creating fake invoices, have been jailed after an investigation by HM Revenue and Customs.
Director Gregory Palin conspired with Paul Marchington to submit two false VAT repayment claims for his Matlock-based company, Palins Direct Ltd, over a six-month period.
However HMRC officers began to investigate after becoming suspicious of the claims.
They arrestedPalin, 44, of Sydnope Hill, Two Dales, Matlock, and Marchington, 35, of the same address, on March 31 last year.
Stuart Taylor, assistant director of criminal investigation at HMRC, said: “This was a pre-planned, deliberate attempt by this pair, to steal a substantial sum of public money to line their own pockets – which was ultimately driven by greed.”
Palins Direct, which is based on Cromford Hill in the Derbyshire town, trades in the distribution and wholesale of fruit and veg, which is subject to zero-rated VAT.
Taylor said Palins Direct was initially paid a claim of £115,758, of which £69,373 was fraudulently obtained.
The firm’s second repayment, for £551,501, was stopped by HMRC on suspicion of being fraudulent.
Following the duo’s arrest and during a search of home and business premises, HMRC officers discovered handwritten paperwork and other evidence proving the scam had been planned months in advance.
The pair had overinflated company purchases and created false invoices, mainly in relation to a new building on the site, to generate the VAT repayments.
After being charged, Palin pleaded guilty to the submission of fraudulent VAT returns and money laundering when he appeared at Derby Crown Court on 30 April.
Marchington pleaded guilty to the submission of fraudulent VAT returns when he appeared at the same court on the same day.
Palin was sentenced to 18 months in prison and Marchington to 12 months yesterday (27 May).
Taylor added: “HMRC will pursue people like Palin and Marchington who attempt to defraud the system because tax fraud takes away money that is desperately needed to fund vital public services.’
Please note: John Palin (Wholesale) Ltd is a separate company and is not linked in any way to Palins Direct
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