Five U.K. Movie Players Charged With $194 Million Film Tax Relief Fraud
LONDON – Five British movie industry names are being charged in a more than $194 million (£125 million) tax relief plan marketed to investors in the U.K.
The charges against Keith Hayley, Robert Bevan, Charles Savill, Cyril Megret and Norman Leighton are being brought by the Crown Prosecution Service on the back of findings by HM Revenue & Customs, the U.K. government's equivalent to the IRS.
The five each will face charges of conspiracy to defraud, conspiracy to cheat the public revenue and conspiracy to falsify documents, the CPS said in a statement Tuesday.
"It is alleged that, between 1 January 2002 and 11 July 2011, a tax relief that allows investors in the British film industry to offset losses against other tax liabilities was abused and dishonestly marketed in order to cheat the public revenue," said Andrew Penhale, deputy head of fraud at the CPS.
"The evidence suggests that the value of allowable losses was falsified, that there was a conspiracy to defraud investors and that documents were falsified for accounting purposes."
At that time, the U.K. was operating a tax relief system which was shut down by the government after it began to be exploited by intermediaries and tax consultancies.
The system was ultimately replaced by the current tax credit system which largely cuts out middlemen and seeks to incentivize producers and movie investors directly and more efficiently.
Bevan and Megret are both listed as directors of Salt, a London-based film production, financing and sales banner and regular Marche du Film attending company.
The company or representatives did not return calls at time of going to press.
Penhale noted: "Hayley, Bevan, Savill, Megret and Leighton are now the subject of criminal proceedings and have the right to a fair trial. It is extremely important that nothing should be reported which could in any way prejudice these proceedings."
Hayley and Savill both are both listed as executive producers of British films including Pure, starring Keira Knightley, a movie Salt helped package on the IMDb.
Details on Leighton could not be immediately located.
The defendants will appear at a magistrates' court in June to face the charges.
They have not yet had an opportunity to respond formally to the charges.
The charges follow hot on the heels of a case that saw five people - four men and a woman – sent to jail for their roles in a $4.1 million film-related tax-fraud attempt.