15th February 2012 Written by Andy Vessey
Although Harry Redknapp and his legal team may have been able to persuade a jury that he was not guilty of any wrongdoing and escape punishment, two accountants have not been so fortunate and have become recent guests of Her Majesty's Pleasure.
Darren Upton, accountant to freelancers, was last week sentenced to six years imprisonment by Leeds Crown Court after admitting 15 offences of fraud during the period January 2010 – June 2011. He also asked for 23 similar offences to be taken into consideration.
Last year the Financial Services Authority (FSA) bankrupted Mr Upton after he failed to pay them funds that were intended for clients who had invested in a collective investment scheme known as the 'Currency Plan' run by his firm, Upton & Co Accountants Ltd in Wakefield. The scheme promised investors high rates of return for investment in foreign exchange markets. Despite not being authorised by the FSA to carry out such business nor possessing the necessary expertise to undertake such work, Upton nevertheless swindled 390 investors out of more than £5 million.
Upton's defence lawyer claimed that although he had made a legitimate annual profit of £250,000, because he had been forced to repay £840,000 to the FSA in monthly instalments of £10,000 this caused him to commit fraud, even whilst on bail.
Upton & Co had around 800 clients, mainly small I.T companies, from whom Upton misappropriated funds. Monies that clients believed were being used to pay corporation tax on their behalf were instead diverted into Upton's own account so that he could continue indulging his luxury lifestyle and maintain a mistress.
As a result of his fraudulent activity, 33 of Upton's clients as well as HMRC were left with losses exceeding half a million pounds. Clients were also left having to pay penalties for unpaid taxes when the crooked accountant was exposed.
Suspicions were aroused by Upton's staff after he made excuses when questions were raised until eventually his employee's reported him to the police.
On the face of it Darren Upton was happily married with a young child, but the truth was that the 40 year old accountant was having an affair with a blonde make-up artist and part-time model, Victoria Fraenzel, aged 36, whom he had met through an internet dating website in October 2010. Miss Fraenzel was unaware that her lover was married until she telephoned his office and was put through to Upton's wife who worked there as the company secretary.
Miss Fraenzel was lavished with gifts of clothes from Harvey Nichols, Mulberry handbags and Ann Summers lingerie. Upton also paid the deposit and rent on a flat in Salford for her use as well as providing her with a living allowance. They also spent evenings out at Hilton hotels.
For himself and his wife, Upton bought Bentley and Maserati motor cars complete with personalised number plates. He also had a box at Leeds United F.C costing £10,000 and even spent £3,000 on a model railway.
Many of the victims of Upton's selfish greed felt utterly betrayed as they regarded him as a friend as well as their trusted accountant. One client even invited Mr Upton as a guest at his wedding. Others were left with their businesses in tatters and suffering ill health. One client even endured a crisis of trust to such an extent that he could no longer engage staff.
Another professional to fall foul of the deadly sin of avarice was David Perrin, who was deputy managing director of Vantis Tax, part of the former top 20 accountancy firm, Vantis, that went into administration in 2010. The cynical fraudster had also worked for the Inland Revenue during the late 1980's and early 1990's.
Mr Perrin was sentenced last week by Blackfriars Crown Court, for attempting to defraud taxpayers of £70 million. Between 2005 and 2006 Perrin advised more than 600 wealthy clients to buy shares valued a few pence each, in four companies that he had formed. Perrin then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares in order to inflate their price.
The shareholders then donated 329 million shares to numerous unsuspecting registered charities and tried to claim £70 million tax relief against a total of £213 million of income and company profits, on the basis that the shares were worth £1 each rather than the pennies they were originally acquired for.
Perrin elicited £2 million in fees from his trusting clients, which he spent on expensive second homes, exotic holidays, works of art and luxury cars.
Such was the success of the tax avoidance scheme that Vantis employees performed a contemptible celebratory rewording of Gloria Gaynor's 'I Will Survive' at their annual conference, which included the verse:
"They should have changed that stupid law
They should have buggered charity
But they left that lovely tax relief
For folks to pay to me"
By Andy Vessey