Four Sentenced in U.K. Film Tax Incentive Fraud Case

A London court handed out sentences of up to seven years after the group was previously found guilty of a $7 million fraud scheme run between 2007 and 2011.

LONDON -- Four people have been sentenced to prison time after being found guilty of over $7 million (£5 million) in a film industry tax fraud.

The Crown Prosecution Service said Monday Anish Anand, Amit Kumar, Sanjeev Mirajkar and Afsana Karim were handed down sentences at a court in the British capital for "cheating the public revenue of more than £5 million."

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Between 2007 and 2011, the group secured $7 million (£4.6 million) by submitting fraudulent VAT returns -- equivalent to sales tax in the U.S. -- and just over $610,000 (£400,000) through fraudulent applications for film industry tax relief through the U.K. government system.

The U.K. tax relief system that was operating at that time 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.

Neena Jhawer, a specialist fraud lawyer at the Crown Prosecution Service, described the four as being involved in a "sophisticated fraud" involving "an attack on two separate elements of the tax system: VAT and film tax relief."

Said Jhawer: " More than 20 film-industry companies were used to facilitate both elements of the fraud, many which were set up solely for that purpose. Over a period of four years, the defendants went to extraordinary lengths to establish an apparently legitimate front to what they were doing -- producing false invoices, scripts for films, shooting schedules, crew and cast lists, detailed budgets, contracts with writers and producers, and rented offices complete with letter heads and business cards."

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The prosecutors described it as a "significant attack on the public purse and on a system designed to support and promote the U.K. film industry."


Two of the film titles amid the complicated fraud included Billy the Beagle and Kaun Bola.

The CPS also told THR that the quartet "hijacked" the details of a movie named London Dreams, which was legitimately made by an unconnected company.

The government and law enforcers hope that the crackdown will send out a clear signal that the tax credit system -- long campaigned for by the legitimate movie industry here -- will be protected against incidents of fraud.

Anand was sentenced to seven years and disqualified for the same period from being a company director.

Mirajkar got 30 months, Kumar 18 months, and Karim was sentenced to 12 months suspended sentence for two years and 100 hours of unpaid work.

"The CPS is committed to supporting HMRC’s efforts to clamp down on those who cost the country billions in lost revenue," the prosecutors said.