A father, son and accomplice who ran a £5m gift aid scam have been jailed for a total of 19 years.
John Davies, 58, of Esher, Surrey was found guilty by Southwark Crown Court of pocketing money from HM Revenue & Customs by claiming tax on non-existent charity donations to two charities. But an investigation into poverty relief charity, the Sompan Foundation and migrant welfare charity, the Kurbet Foundation, revealed that many of the individuals reported to have donated to the charities did not exist.
The pair submitted tens of thousands of Gift Aid repayment claims, between 2007 and 2012, based on donations seemingly made by taxpayers. However, an investigation by HMRC revealed that “every single donation” had been faked by the men, who used names and addresses of real people, including some of whom had passed away, to claim the gift aid.
Judge Stephen Tomlinson told Davies on Friday he was an “arrogant individual” who “sought to steer [investigators] away by letting them know all the good work you were doing and criticising HMRC”.
“It is the country that has been harmed and people like the tax-paying jurors in this case,” the judge said.
Davies was jailed for a 12 years, while his son Benjamin Davies, aged 31, was jailed for three years. A third accomplice, Olsi Vullnetari, aged 38, was jailed for seven years.
Gift aid payments totalling £3.3m were claimed on behalf of the charity Sompan between March 2007 and January 2014, while a further £1.7m was claimed through the second charity Kurbet. The money was distributed via Hungary to 15 countries including the US, Ireland and the UAE.
Vullnetari was a trustee of Sompan from 2004 until 2008 and Benjamin Davies became a trustee in 2008 until his resignation in August 2012. The court heard that the younger Davies used a fake passport with an assumed identity to carry out some of the transactions.
According to Charity Commission records, the regulator has not received annual accounts from either charity for several years.
The last submitted accounts from the Kurbet Foundation were received in 2011, for the year ending 31 December 2010. They report an income of £218,500 and expenditure of £220,000.
The Sompan Foundation last filed accounts in 2012 for the year ending 31 December 2011. They report an income of just under £3.5m and expenditure of £3.4m.
A spokesman for HMRC told Civil Society News that while both charities were legitimately set up to support women and children in crisis around the world, John Davies “spotted what he thought was a golden opportunity when the charities’ original founder died – to turn them into an illegal money-making scheme”.
Assistant director of the Fraud Investigation Service for HMRC, David Margree, said the men “despicably extorted £5 million from honest British taxpayers”.
“Gift aid is in place to support legitimate charities and offer extra funding, not for the financial benefit of criminals who abuse the system," he said.
"HMRC and our partner, the Crown Prosecution Service, have brought to justice these fraudsters who, had they not been stopped, would have continued to rob public services and genuine charities of a great deal more.”
