Dungannon couple jailed over £4.6m tax fraud
A couple were jailed today after admitting a £4.6 million tax fraud.
Patrick Small, 56, and his wife Mary, 50, stashed millions of pounds in offshore bank accounts and failed to declare tax worth £4.6 million over a period dating back to 1995.
Belfast Crown Court Judge Anthony Hart jailed Patrick Small for three-and-a-half years and Mary Small for two-and-a-half.
The judge said of Patrick Small: "He was prepared in a dishonest and unedifying fashion to shift as much of the blame on to his wife as he could."
The judge said the couple built at least 20 new houses with the money - originally gained from their builders' merchants in Dungannon, Co Tyrone - and lived in a sprawling 12,000 square foot mansion.
Customs officers who raided the premises discovered £492,238 in cash at the property, stuffed into a concealed safe.
Mr Justice Hart added: "Such was the scale of the defendants' tax evasion that the prosecution have confirmed that this is by far the largest case of its kind to come before the Crown Court in Northern Ireland."
Despite this they still claimed tax credits.
Investigators discovered a video of Mr Small meeting a bank official from the Isle of Man in 2004.
He told the banker he was aware of the taxman.
"I told him nothing, I told him I had not a penny about whatsoever," he said.
The judge said the defendants pleaded guilty to counts of cheating Revenue and Customs and, in the case of Mrs Small, to charges of false accounting between November 2000 and March 2004.
They carried on business under the name of Greystone Builders' Merchants at their Cullenramer Road home.
From the tax year 1988/89, Mrs Small had money on deposit in the Isle of Man on which she did not pay tax because she did not declare the interest to the tax authorities in this jurisdiction.
In the five years from 1988/89, both Mr and Mrs Small had money in the Isle of Man and evaded tax.
The builders' merchants generated substantial profits. Bank deposits were generated by transactions which never went through the company's books. Over the decade from August 1995 these undeclared sums amounted to £2.7 million.
They also cashed cheques which were never put through the company's books. Over four and a half years from February 2001, cheques worth £1.2 million were cashed but not recorded in the company's books.
Records seized showed they amassed a property empire of 23 separate buildings, land or sites as well as some uncompleted houses. In late 2005 their value was £6.6 million although that has fallen.
The judge said the amounts involved were not disclosed over a 17-year period, the last ten of which involved non-disclosure on a very large and persistent scale.
Inland Revenue opened its inquiries because of concerns about money being concealed which helped fund their film star lifestyle. The defendants were arrested in November 2005.
At that stage Mrs Small denied the existence of other accounts either in Northern Ireland or offshore when interviewed by a tax official.
Business records were systematically falsified to conceal what they were doing.
The judge said wheelchair-bound Mr Small, with a litany of health problems, was not guilty of false accounting charges but it was he who took charge of building their many properties.
"They were equal partners in the business, legal and matrimonial sense," he added.
Mr Small suffers from diabetes, hypertension and is morbidly obese. The judge said he had a neurotic personality.
He added: "His apparent belief that he is suffering from dementia and has only a short time to live is not well-founded and instead he is someone who, whether deliberately or otherwise is immaterial, has convinced himself that his mental condition is deteriorating to a much more significant degree than is in fact the case."
The couple have three children aged 18, 16 and 10.
The judge added that in the case of Mary Small he considered her co-operation throughout, her genuine remorse and in particular the effect of her imprisonment upon her children justified a more lenient sentence than that imposed upon her husband.
However, he said: "The amounts involved were very large indeed and there was systematic concealment of money by various means over many years, as well as deception of the tax authorities when she was interviewed on a previous occasion.
Clare Merrills, spokeswoman for Revenue and Customs, said: "The Smalls were stealing taxpayers' money over many years and clearly had no issue with enjoying the benefits of our public services whilst not contributing towards them. Even £2 million stashed in offshore accounts didn't deter them from claiming tax credits.
"Income tax and VAT fraud are not victimless fiddles and the days are long gone when hiding assets off-shore was seen as a safe bet for evading UK taxes."