British Filmmaker Found Guilty of $2.3 Million Tax Fraud

A U.K. court has ruled that Richard Driscoll is guilty of fraud over false tax claims made for movies including "Eldorado," starring Daryl Hannah, David Carradine and Michael Madsen.

LONDON – U.K. director-writer-producer Richard Driscoll has been found guilty of a $2.3 million (£1.5 million) tax fraud in a British court over movie invoicing for projects including Eldorado, starring Daryl Hannah, David Carradine and Michael Madsen among the cast.

The decision by a court in the British capital Wednesday was made public by HM Revenue & Customs, the British answer to the U.S. IRS.

STORY: Five Sentenced to Jail Over U.K. Film Fraud Scheme

U.K. authorities have recently been cracking down on movie production-related tax fraud. In April, five British movie industry executives -- Keith Hayley, Robert Bevan, Charles Savill, Cyril Megret and Norman Leighton -- were charged for allegedly defrauding a $194 million (£125 million) tax relief scheme marketed to film investors in the U.K. Earlier, in March, a separate five film industry professionals were sentenced to jail time for a $4.1 million film-related tax-fraud attempt.

According to HM Revenue & Customs, Driscoll "falsified invoices for the costs of making films in order to reclaim VAT [Value Added Tax, equivalent to a sales tax in the U.S.] back that he was not entitled to and set up a number of associated companies that were used purely to commit the crime.”

Paul Barton, assistant director of Criminal Investigation at HMRC, said: "HMRC investigators have unraveled a complex and organized VAT fraud. Driscoll knew that he was breaking the law, yet chose to overlook it for the opportunity of making what he wrongly assumed would be easy money, at the expense of the U.K. taxpayer."

STORY: Five U.K. Movie Players Charged With $194 Million Film Tax Relief Fraud

A comedy/horror/musical, Eldorado also starred Jeff Fahey, Steve Guttenberg and former Doctor Who Sylvester McCoy. It was the last movie Carradine appeared in before his death in 2009.

The British 3D movie never made it into movie theaters, and went straight to DVD in the U.K.

Driscoll owned a film studio in Cornwall where the films were made. The claims for repayment of $2.3 million (£1.5 million) in VAT was based on production costs of more than $13.8 million (£9 million), but investigators found that the costs were actually less than $1.5 million (£1 million).

"Bogus invoices were sent to support the false repayment claims and other invoices were genuine but had their values inflated," the tax authorities said.