Men used VAT scam money to buy gold bullion, diamonds and £1m home

Four men face lengthy jail terms after a £9m VAT fraud probe.

Leslie Thompson, 63, Graeme Cullen, 54, Graham Newall, 49, and Martin Lang, 68, were convicted following a trial at the High Court in Glasgow.

Thompson, of Bathgate, was described as the “kingpin” in the scam, who made a pledge to become a “squillionaire”.

The dirty money went towards gold bullion, diamonds, fast cars, a £1m home and plans for a luxury property development in Bulgaria.

The four were caught following a large-scale investigation by HMRC officials.

Prosecutor William Frain-Bell KC told jurors during the trial: “As the late footballer George Best once asked: ‘Where did it all go wrong?”.

“Well, it went wrong simply because it was wrong – very wrong.”

Thompson, Cullen and Newall were convicted of the fraudulent evasion of £8,831,124 of VAT between September 2015 and June 2017.

The offence was said to have a connection to serious organised crime.

Lang had pleaded guilty early in the trial to a reduced sum of £4,813,493.

After the verdict was delivered, jurors were told that Thompson received a six-year prison sentence in June 2024 at Southwark Crown Court for a charge of conspiring to cheat.

He was also disqualified from being a director of a company for 12 years.

Cullen and Newall each have one previous conviction for a road traffic matter.

A proceeds of crime hearing on all four men will take place in June.

Lady Hood remanded the men in custody as sentencing was deferred until next month at the High Court in Edinburgh.

The men were involved in what was described as an “incredibly simple”, but “well-organised” payroll fraud.

Jurors heard of the names of a number of firms used to carry out the lucrative crime, including Linear Services based in Livingston, West Lothian.

Linear was “open for business” in September 2015, using a client base from a company that had been shut down by HMRC.

The trial was told VAT was charged on invoices to various firms for “payroll services”.

But, Mr Frain-Bell said: “The tax collectors in this case were a group of individuals who never had any intention of parting with the VAT.”

The cash was siphoned off from various bank accounts to those involved, as well as associates and family members.

Mr Frain-Bell said: “It was short, it was simple. Set up the structure, get recruitment clients on board, collect as much VAT money as possible before HMRC cottoned on.

“Get it shipped out abroad to America and Bulgaria, buy as much gold bullion and diamonds as possible, as you saw from Leslie Thompson’s bank statements.

“Throw in luxury four-wheeled treats, smart clothes, watches, holidays and fancy restaurants.”

The court heard “the descriptions of expenditure, intrigue and foreign destinations” were like something from a TV drama.

The advocate depute said: “There were the trips to Malaga, the Grand National, fast cars including Audi RS5s, Range Rovers and Mercedes.

“There were mini gold bars, gold bullion and diamond purchases made along with Swiss bank accounts.

“Graeme Cullen spent £2,000 on a Louis Vuitton handbag as well as the ‘dropping’ of around £8,000 for the purchase of two Tag Heuer watches.

“This was along with shopping sprees in Hugo Boss, Hermes and Cruise to name a few before dining in style in some of the best restaurants.”

There was also evidence about plans for the plush Black Sea Plaza property development in Bulgaria that eventually turned instead into a “nightmare”.

Thompson was described as “kingpin” and “mastermind” of the scam.

Mr Frain-Bell said: “Leslie Thompson was there at the start, middle and end of the 21-month-long VAT fraud during which time he and his immediate family unlawfully pocketed just under £3m.”

The prosecutor urged jurors that because Thompson was not a director of any of the firms or a signatory on bank accounts did not mean he was an “innocent investor” caught up “in the crossfire” of a large-scale crime.

Cullen, of Giffnock, East Renfrewshire, was described as the “banker” or the “finance guy”.

But, Cullen told the trial: “I was not responsible for the VAT or any other tax payments.”

One witness described him as “quite flashy, driving a Range Rover and wearing flashy suits”. He appeared to be “the brains”.

Mr Frain-Bell said that description was apt for someone who played a “key part” in a near £9m fraud with money then “calmly distributed”, including to various “persons of interest”.

Cullen claimed in court that any money paid out was on the orders of Newall and Thompson.

Newall, of Edinburgh, was said to know how “payroll administration worked”.

Mr Frain-Bell said: “It is inconceivable to suggest that he was unaware of the fraud that he was part of.”

The court heard Newall always knew “the doors would come in” on the scam.

He told one man how cash was being thrown “left, right and centre”, allowing him to take his family to Florida.

But, he added: “I did…just enjoy myself, you know – just trying to pretend it would be okay.”

Mr Frain Bell stated this “head in the sand approach” soon unravelled.

Newall boasted to the same man that he was “used to very high living”. which included a house that cost £1m to build, a Range Rover, a Land Rover Discovery and a child at private school.

Newall also claimed he did not know what was going on and was more involved with a tyre recycling business in Glasgow’s Castlemilk – described by prosecutors as an “investment” from the Linear Services “empire”.

But, Mr Frain-Bell stated: “He knew what was going on behind the facade that was Linear Services – it was payroll fraud.

“He may have been tied up with his tyres in Castlemilk, but he was still seen in and around the Livingston offices by the employees and was clearly involved in the operations, including even chairing a Linear employee’s disciplinary hearing.”

Only one incorrect VAT return was made – for the relatively small sum of £959.76. Newall’s involvement in this part of the charge was deleted by the jury at the verdict.

Lang, of Cambuslang, also had a vital role in the crime, including being at a meeting with Cullen and Newall. Prosecutors stated he was “knowingly concerned” in the plan to evade VAT.