Fraudulent ex-solicitor ordered to repay taxman £800k

Topics: Regulation and compliance,Tax law

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A former solicitor has been ordered to pay back £800,000 of the £2m he made from an elaborate tax-evasion scheme.

Malcolm Graham will have to pay the amount back within three months or face a default jail sentence of up to five and a half years.

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Graham was a solicitor and director at Gateshead firm SFM Legal Services Limited, and he encouraged clients to sign up to a scheme to reduce their tax liabilities.

But the scheme was a fraud, with Graham using altered legal documents to make it appear legitimate, and signing up hundreds of wealthy clients.

The plan manipulated the clients’ property transactions and tax returns to fraudulently reduce the amount of stamp duty they owed to HM Revenue & Customs.

Following a Proceeds of Crime Act hearing at Newcastle Crown Court yesterday, Graham was ordered to pay back the £800,000.

Dave Cowie, assistant director of the fraud investigation service of HMRC, said: ‘Graham tried to pull the wool over his clients’ eyes in a failed bid to profit from an elaborate tax-avoidance scheme.

‘But HMRC saw the "scheme" for what it really was – fraud. Our work doesn’t end with a successful prosecution – we leave no stone unturned in the recovery of stolen public money.

‘The message is clear: rip off the taxpayer, and we will use the courts to empty your pockets.’

Graham, 40, was struck off by the Solicitors Disciplinary Tribunal in 2009 following a prosecution by the SRA, and also ordered to pay costs of £116,800.

The tribunal found his conduct had been ‘extremely serious involving huge losses to clients and considerable damage to the reputation of the profession’.

He pleaded guilty to seven counts of fraud by false representation at Newcastle Crown Court in October 2013. He received a two-year prison sentence on each count, to run concurrently, suspended for two years. He was also disqualified as a director for five years.

The solicitor had previously been the subject of glowing articles in the local press as a result of the rapid expansion of his practice during the property boom.

Readers' comments (10)

  • Two years suspended! That's a fraud on the rest of us taxpayers. It should at least be immediate with time off when all the tax is repaid.

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  • Pity HMRC couldn't take the same line with the big multi nationals. Nice to see SME shareholders taxes increasing, pension tax relief under threat and the joyful prospect of working until we're 75 ! Why, because Osborn and HMRC, just like the SRA, do not want to take a harder line on the 'big boys'.

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  • Don't the wheels of justice turn slowly!
    Struck off in 2009, convicted in 2013 but it takes until March 2016 to have a POCA hearing.
    Clearly no-one there working on a "no win, no fee" basis.

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  • It's not called Stamp Duty anymore. It's called SDLT. Stamp Duty remains a voluntary tax as far as I am aware. Sorry for being pedantic.

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  • Post #4: YES.
    Despite ignorant journalists' comments, the rate of SD is unchanged at 0.5% It has not applied to property for many years.

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  • And what does SDLT stand for, Anon the Last?

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  • David, If it's shocking and puzzling to you, imagine how incomprehensible it is for taxpayers but non-lawyers like me, not to mention those for whom it is more evidence for their conspiracy theories. And it certainly seems another justification for my dubiousness about judges. Just what scale (indeed, is there any?) are they working on in this matter of sentencing?
    I would like to be able to sit the whole lot of them down in a large building, each with a copy of all their cases over the previous 5 years. They would be told that they would be mercilessly cross-examined on any apparent contradictions in how they had dealt with apparently similar cases. Then all the apparently similar but contradictory cases dealt with by different judges would be similarly put to those judges to see if they could produce rational defences for their differences. I wonder how solicitors think the records of that process would make them, and citizens, feel about our system of 'justice'.
    And the delays: how? why? Especially as the HMRC are in it, it surely can't be - Oh, the Courts are too busy, we don't have the staff etc.

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  • Amazing isn't it, a suspended sentence. I've just read about a struggling single mother who falsely claimed a jobseeker benefit for a few years, the total fraud less than 1/20th of this. Her sentence wasn't suspended. The rich and the powerful buy off the richer and more powerful. Plus ca change

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  • If he 'made' £2m out of the fraud, why doesn't he have to pay that back? Have we now become a country where crime pays, even the crimes of a lawyer? Come to think of it you would have to be a 'magic circle' partner to make £2m in two years. So, yes, it seems crime does pay.

    HMRC up to its tricks again? Good job the Met. didn't prosecute, or he would have been allowed to keep the lot.

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  • Consistency in legal sentencing, there's a thought.......

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