Tax fraudster jailed

Jun 8 2012 By Stuart Gillespie

TAX cheat Stephen Maxwell was yesterday jailed for five years after failing to declare nearly £2 million of income.

The 53-year-old IT consultant of Wallach Brae, Dalbeattie, was sentenced at Kirkcudbright Sheriff Court after being found guilty following a six week trial.

Sheriff Kenneth Robb told Maxwell he did not agree that by evading £653,000 in tax and National Insurance payments that he had “caused no harm”.

Some members of the jury who convicted Maxwell on April 16 were present in court to see him sentenced.

Also there was his wife, Susan, who had originally been a co-accused before being cleared.

During the trial the court heard how Maxwell earned as much as £800 a day while working for City of London banks.

However, at the same time he was involved in  a fraudulent scheme in a bid to avoid paying tax using offshore accounts in places such as Gibralter and the Isle of Man.

Defence council Andrew Murphy told the court yesterday that it was “his accountant and so-called financial advisers” who brought Maxwell, a first offender, “into this”.

“The scheme was not of his own invention,” he said, pointing out that “complex” tax laws make it difficult for experts to know what is and is not legal.

Mr Murphy said: “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 tax authorities and later his accountant in bankruptcy. “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 described Maxwell as “a shy individual and there is a touch of unrealism and unworldliness about him and I think some of his local schemes testify to this side of his character”.

He added: “In the end all of this has brought him no final financial reward, all has been lost.”

This includes Barncailzie Hall at Springholm, which Maxwell was found to have tried to put beyond the reach of creditors.

Mr Murphy said this had now been repossessed by the bank. Sheriff Kenneth Robb said: “It was a scheme that was long in the planning and very long in the execution.

“I do not agree with the opinion that the conduct caused no harm. £635,000 is a lot of money which would have helped the public purse.”

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

Sheriff Robb said his biggest decision was whether or not to send the case to the High Court for sentencing but dealt with it himself by jailing Maxwell for five years, backdated to his conviction on April 16. HMRC spokesman David Odd  said: “This was a case of deliberate and systematic fraud

The tax system depends on people being honest but Maxwell consistently tried to conceal his income. Income tax fraud is not a victimless crime and HMRC take a very serious view of anyone who acts in this manner.”