£98 million film investment tax evasion scheme defendants convicted

Robert O’Sullivan QC (instructed by the CPS Central Fraud Group), together with Patrick Harrington QC and Jonathan Rogers, successfully prosecuted three film producers and financiers together with an off-shore corporate management services provider following a trial lasting nine months at Birmingham Crown Court.

The defendants were convicted of conspiracy to cheat the public revenue, following an investigation by HM Revenue & Customs into a marketed income tax avoidance scheme which exploited the tax relief available to UK investors in respect of losses incurred on investments in the purported development and pre-production of films.

Keith Hayley, Robert Bevan and Charles Savill devised and operated the scheme through four limited liability partnerships managed by their London based company Little Wing Films. They obtained investments totalling some £76 million from a large number of high net worth individuals. Those funds were then dishonestly recycled through a series of bank accounts in Guernsey, Monaco and Switzerland held by linked off-shore companies with the result that the partnerships claimed expenditure in their first trading year totalling over £250 million, which enabled the unwitting investors to seek to set-off £98 million against their personal income tax liability. Development services were purportedly to be provided in respect of some 302 film projects by a Monaco based company, International Film Collective, managed by Norman Leighton.

The defendants were sentenced to a total of 29 years imprisonment. A fifth defendant was acquitted. Confiscation proceedings are ongoing.

See links for news coverage: The Times and The Financial Times.