Preston woman and co-defendant laundered more than £100,000 for fake tax claim criminals
Two young women agreed to move illegal cash through their bank accounts as part of a complex scam against HMRC.
Rachel May Chapman, 24, of Wadham Road, Preston, and Kathryn Stanley, 20, of Bobbers Mill Road, Nottingham, accepted tax repayments under HMRC's Construction Industry Scheme for deductions which had never existed.
Under the Construction Industry Scheme (CIS), which contractors must register for, contractors deduct money from payments to subcontractors - including self employed people who are obliged to carry out tax returns.
The deductions are passed on to HMRC and count as advance payments towards the subcontractor’s tax and National Insurance.
In some cases subsequent tax returns from a 'subcontractor' can result in a repayment for overpaid tax.
Preston Crown Court heard the fraud involved criminals making bogus claims for tax repayments back on behalf of fake businesses or individuals, and aroused suspicions when the same few bank accounts were nominated for making repayments into, including the two defendants'.
The probe centred around 69 tax returns in the years 2015 to 2016 and 2016 to 2017 for what appeared to be 19 individual tax payers, including Stanley.
None of the 19 individuals had had tax deducted under the CIS scheme, only two of them were registered under it, and a pattern emerged in similar turnovers, net profit and deductions stated.
A Lancaster IP address from which some of the self assessment accounts were accessed was registered to Chapman's father with whom she had been living.
Prosecutors said between June and September 2017, payments totalling £57,000 passed through Chapman's accounts and payments of around £42,000 passed through Stanley's.
Claims for further £185,000 were made but never paid.
The court heard Chapman paid the cash into three newly opened bank accounts held by herself, with various descriptions allocated to the transactions to disguise what was going on.
The cash was later withdrawn at ATMs or in banks.
In a prepared statement one of the women claimed she became friends with a woman who told her she was in a toxic relationship and wanted to get out, and had asked to use her account to receive inheritance payments, and admitted she accepted a small payment for allowing her account to be used.
A woman the defendants mentioned to police was also arrested but there was not enough evidence to establish her involvement at that time.
Their defence lawyers said they were vulnerable, had suffered troubled childhoods and were easily taken advantage of.
But in the four years since the offences both women have turned their lives around, with Stanley securing a £26,000 a year apprenticeship in railway engineering with Network Rail.
Judge Philip Parry described it as a "serious and sophisticated criminal enterprise" but said he was impressed by their efforts since.
Imposing a 12 month community order, 100 hours of unpaid work and a rehabilitation requirement, he said: "It seems the same person befriended each of you separately from one another but no doubt under direction of the more sophisticated fraudsters and you each fell for this person's request to use your bank accounts.
"The sums of money going through your account on this person's behalf were substantial.
"You must have had very high suspicions, if not knowledge, that what was going on here was illegal.
"You are both to be commended on the things you have done in the last three years to put your lives back on track when it could have gone a different way very quickly."
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