Fraudster jailed for five years

In a statement following the sentencing of Stephen Maxwell from Dalbeattie, who has today been jailed for five years for evading more than £600,000 in tax, David Odd from HMRC said:

A 53-year-old man who was involved in off-shore tax avoidance has been jailed for five years. Stephen Maxwell of Wallach Court, Dalbeattie in Dumfries and Galloway, was found guilty at Kirkcudbright Sheriff Court of avoiding paying more than £600,000 of tax and national insurance contributions.

Maxwell, an IT consultant and contractor hid the money from Revenue & Customs over a nine year period with his fees for his services from the bank being into companies – of which he was a hidden beneficiary - registered in Gibraltar and the Isle of Man.

Maxwell was found guilty on charges of pretending to Her Majesty's Revenue and Customs that he had no taxable income over a nine year period to May 2008. He was convicted of forming a fraudulent scheme to evade paying £635,015 to HMRC by failing to reveal earnings of almost £2 million.

During the trial it was stated that Maxwell was earning £800 a day working as an IT consultant for JP Morgan Chase Bank and Deutsche Bank. He was originally charged with avoiding payments of more than £1.7 million. This amount was reduced and charges against his wife were dropped.

Maxwell, who was said to own offshore companies in the Isle of Man and Gibraltar. He was accused of putting assets beyond the reach of creditors, in particular HMRC, by buying Barncailzie Hall near Castle Douglas. His agent, Advocate Andrew Murphy said the scheme was not Maxwell’s invention.

“Event to tax experts it is a law which is complex. His error was maybe, at an early stage, he did not seek sound advice about the legality of the scheme and this was compounded by not being up front with the income tax and bankruptcy,” he said.

Mr Murphy added: “He made no effort whatsoever to make payment and once into the scheme he did not seek a way of finding a way out. He blindly carried on hoping not to be discovered.

"He was obsessed with computers and it seems he had a high talent which was probably wasted. He revelled in solving computer problems and worked seven days a week and all his holidays.” Mr Murphy said the scheme had not brought Mr Maxwell financial rewards, all had been lost.

Sheriff Robb said he did not agree with Maxwell’s agent that he had harmed anyone and said that in this age of constraint £635,000 was a lot of money and would have helped the public purse.

He told Maxwell: “You have enjoyed the fruits of your labour and the tax that you should have paid. The tree may be bare but you used the fruits over many years.”

Maxwell’s sentence was back-dated to March and Proceeds of Crime hearing has been adjourned until August.