Financial News

Runaway Tax Fraudster Starts Six Years In Jail

A runaway fraudster who scammed more than £1 million by posing as a bogus tax agent has been brought to justice and returned to the UK to serve a six-year jail sentence.

Leib Berger, a South African who lived in London, was originally sent to prison for two years and ordered to pay £250,000 compensation in 2011.

Berger, who also goes under the name of Lawrence Goldberg, stole the £1 million by hijacking identities and inventing fictitious clients to claim tax refunds from HM Revenue and Customs (HMRC).

To avoid jail, he skipped the country for a new life in Spain.

While he was on the run, HMRC inquiries revealed he had more assets than he had disclosed and the matter was returned to court, where a judge ruled the confiscation order should increase to £1.5 million and the jail sentence to six years.

Chasing expats for tax debts

Berger was tracked down to his Spanish bolt hole and returned to Britain this week to start his time in prison.

The case illustrates HMRC’s ability to chase debtors around the world.

Failing to tell HMRC that you have moved overseas does not stop the tax authority chasing debtors for the money they owe.

A network of Mutual Assistance in the Recovery of Debt (MARD) agreements set aside the principle of English law that courts in one country cannot make an enforceable ruling against someone living elsewhere.

The countries willing to enforce MARD include Austria, Germany, Poland, Belgium, Greece, Portugal, Bulgaria, Hungary, Ireland, Cyprus, Italy, Romania, the Czech Republic, Latvia, Slovakia, Denmark, Lithuania, Slovenia, Estonia, Luxembourg, Spain, Finland, Malta, Sweden, France and the Netherlands.

Long arm of HMRC

MARD allows HMRC to take the same enforcement action in a participating country as would have been taken in the UK.

“We can ask the local tax authority where the debtor is living to get money from them. The same applies to tax debtors who move to the UK. We will collect any tax due on behalf of the debtor’s home tax authority,” says HMRC.

“The debt is outstanding until it is paid, and interest and penalties will be added.”

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