Conman who diverted firm's VAT payments into own account jailed
An accountant who pleaded guilty to 19 charges relating to a £70,000 VAT, tax and mortgage fraud has been jailed for 12 months.
Father-of-five James Joseph Heaney (46), from Spruce Meadows in Londonderry, committed the offences between October 2011 and February 2013.
The investigations into his offending started in February 2013 when he contacted HMRC and reported to them that he had submitted erroneous VAT returns.
Heaney sat quietly in the dock in Derry Crown Court yesterday as Judge Stephen Fowler told him that his offending had crossed the custody threshold.
Judge Fowler said it was clearly a breach of trust case which involved premeditation.
He said Heaney had falsely presented himself as a director of a company known as 2 Strand Road Limited to HMRC.
He had concealed from the company directors their true VAT liabilities and instead pocketed almost all of their money.
Heaney was acting as an accountant on behalf of the Hill Billy Fried Chicken outlet at Strand Road. He changed the payee on company cheques made out to HMRC to his own name and lodged the monies into his own account.
Judge Fowler said Heaney also involved his son and daughter in his offending to enable them to get mortgages to buy two houses, one at Elmwood Terrace and one at Drumleck Drive.
He told Lloyds Bank that the houses were for private residential purposes only but he rented the properties out to students.
In order to get the mortgages for his two children, he submitted false figures for their earnings to Lloyds Bank.
He told them that his daughter and son each had an annual income of £25,000 whereas the true figures were £3,481 and £1,812 respectively.
Judge Fowler said the actual directors of 2 Strand Road Limited were unaware of Heaney's offending. He had hidden his illegal activities from them by depositing almost all of their VAT liabilities into his own bank account.
On one occasion when Heaney presented a cheque for lodgement to his bank, the bank staff refused to accept it.
In passing sentence Judge Fowler said he took into consideration Heaney's pleads of guilty and his personal circumstances, that he was a broken man following an earlier bankruptcy, that he had medical problems and that he and his wife had adopted an autistic child.
"I have also read several testimonies, many of them moving, submitted on his behalf. I also take into consideration that he has been assessed by the Probation Service as presenting a medium risk of re-offending over the next two years and that he does not pose a danger to the public", he said.
However, Judge Fowler said he also took into consideration that Heaney had involved two of his children in his "premeditated and nefarious activities" and that he had deliberately hidden his offending from the company directors by using their money to offend.
"People need to understand the consequences of such a large scale fraud in that a prison sentence will almost inevitably follow. There is an obligation on judges to impose the appropriate sentence for offending such as this", he said.
Heaney will spend six months in custody and six months on licence after his prison release.
He came before the court with 13 previous criminal convictions, four of which related to two large scale fires at two tyre recycling depots in the Campsie and Pennyburn areas of Derry in 2008 for which he was sentenced in June 2014 to 240 hours of community service.