A former HM Revenue and Customs (HMRC) VAT inspector has been jailed for using the “hijacked” identity of a dead man to cover up £171,000 of tax fraud.
James McGee of Troon, South Ayrshire, was making false VAT repayment claims while using the hijacked identity of a dead man to cover up his fraud.
The 66-year-old was arrested in 2013 with two bank cards in the deceased man’s name.
One of the accounts had been opened after the man died and the other had been credited with some of the illicitly obtained money.
His role in the fraud was uncovered during a joint investigation by HMRC and the National Crime Agency (NCA).
McGee was initially arrested as part of a NCA investigation into identity fraud, of which he was cleared of any wrongdoing. It was during a search of his property following arrest that officers recovered documents suggesting he was involved in VAT fraud, triggering the HMRC enquiry.
Officers searching McGee’s home found handwritten paper records from his house containing detailed information on several VAT registered businesses.
Experts then confirmed the handwritten records matched McGee’s entries in his old HMRC diaries and notebooks.
In total, £101,443.14 was paid out due to the false VAT repayment claims, while a further £70,351 was withheld by HMRC.
He was sentenced to 30 months in jail on Monday at Ayr Sheriff Court.
Lynsey Thompson, operational lead of the Fraud Investigation Service at HMRC, said: “McGee used his knowledge of the VAT system to coordinate a scheme to steal from the public purse – money that is essential to fund the services we need, such as hospitals and schools.
“This was a shameful way for a former employee of 34 years to act, but this conviction shows that nobody is above the law.”
McGee initially insisted the individual whose identity he used was the real controlling mind behind the criminal scheme. In reality, he, with the help of others, was central to the fraud.
Laura Buchan, procurator fiscal for Specialist Casework, said: “James McGee and his associates used their knowledge of the system to steal significant sums and then tried to cover their tracks by laundering the money.
“The multiagency investigation into their actions was long running and complex. This sentencing brings that difficult work to a conclusion and is testament to the partnership working between COPFS, HMRC and the NCA.”
Mark Dryden, 37, of Glasgow; Carly McGinley, 33, of Clydebank; and Gary Prentice, 36, of Glasgow, were all sentenced at Ayr Sheriff Court on February 7, 2022, for their involvement with the scheme.
Dryden was jailed for ten months, Prentice was ordered to complete 300 hours of unpaid work within 24 months and is subject of a Restriction of Liberty Order for four months, and McGinley was fined £1,120.