A brilliant barrister’s career was in ruins today

A brilliant barrister’s career was in ruins today (FRI) after he was jailed for using his expertise to mastermind a pnds stlg 2.

5 million tax scam.

Mega-rich Michael Stannard, 51, took over firms which had set aside money for Revenue bills, and then apparently wiped out the debt snd pocketed the cash.

Stannard claimed he had spotted a loophole in the law, and the plan was a legitimate tax avoidance technique.

But he was given four-and-a-half years prison today after being convicted of two charges of cheating the Revenue.

Judge Peter Fingret told Oxford graduate Stannard: ‘There was a myriad of unique features in this fraud.

‘Indulging in cheating the Public Revenue on the scale which you were found to have done involved playing for very high stakes.

‘The profit was considerable and the punishment must reflect such gains.

‘It is sad that a man of such stature and talent has been tempted to fall into believing that he can beat the system by such means.

‘

Disgraced Stannard, a consultant in corporate tax affairs, was described as a ‘professional tax avoider’ during his trial at London’s Southwark Crown Court.

Along with merchant banker Robert Nelson, 66, Stannard embarked on a series of predatory takeovers of companies that had set aside cash to meet their Corporation Tax bill.

He then orchestrated a string of sophisticated financial deals to erase the liability, dividing the lion’s share of the proceeds with former tax barrister Nelson.

It is believed the controversial strategy netted both men a whopping pnds stlg 1.

25 million.

But Stannard was found to have defrauded the public purse when he set up what he described as a ‘Mickey Mouse’ bank, allowing him to create his own financial documents to present to auditors and ultimately the Inland Revenue.

Prosecutor Peter Rook, QC, said Stannard and Nelson identified companies – Bonnington Shipping and Fairflight Leasing – which had money squirrelled away to meet tax liabilities.

The pair then bought up the firms at a price which took into account the bill owed to the taxman.

Lichtenstein-based Anglo-Austrian Finance, another company run by Stannard, would make pnds stlg 160 million in debenture loans to Bonnington and Fairflight.

Advance interest repayments then appeared to extinguish the tax debt.

In a money merry-go-round the newly-acquired companies then invested in Stannard-controlled firms in the Isle of Man, Jersey, and Eire.

By ‘wiping out’ the tax debt, Stannard and Nelson shared the spoils – but Mr Rook told the court that the circular flow of cash was a paper ‘fiction’.

He explained: ‘Since this scheme is underpinned by totally fictional transactions, it amounts to dishonest tax evasion.

‘

A director of Anglo-Austrian told the trial that the loans were never authorised.

Initially, Stannard had used the grand-sounding Allied Banking Corporation, licenced in the Republic of Nauru, a Pacific island.

But after falling out with its owner, he formed his own bank, the Hong-Kong based Investment Bank of Europe and the United States.

Registered in Edinburgh as an offshore partnership, it did not need a UK banking licence.

Its Far East base was discovered to be nothing more than an accommodation address.

Mr Rook added: ‘One of the beauties of controlling a bank yourself or being in league with accomplices controlling a bank, is false documents – window dressing.

‘

As a result, Stannard was able to print his own paper trail over transactions.

Even his own barrister admitted that Stannard was an expert in British tax rules.

Linda Dobbs, QC, said: ‘He has a passion for the intricacies of tax laws.

To use a colloquialism, he is the tax equivalent of an anorak.

‘

Stannard, who defended himself in the trial, maintained he legitimately avoided the tax bills, and argued that recorded transactions between copanies were legally enforcable debts.

The crook, who once boasted homes in Jersey, France, and Switzerland, said he used the offshore banks because the Revenue had warned finance houses in this country from becoming involved in tax-avoidance schemes.

He admitted that he used nominee companies to keep his name in the shadows, but claimed that if questioned by auditors or the Revenue he would have admitted the truth.

Stannard, of Tivoli Street, Cheltenham, Gloucestershire, was found guilty of two charges of cheating the Public Revenue in relation to Bonnington Shipping between January 1993 and October 1997, and Fairflight Leasing between October 1992 and October 1997.

He was acquitted of two similar charges relating to Linsrim Shipping and Chapel Shipping between March 1991 and October 1997 – and the allegation that he evaded a further pnds stlng 4.

9 million.

He smiled at family and friends in the public gallery as he was led from the dock.

Nelson, of Petersfield Road, Greatham, Hants, was cleared of all four charges at the trial.

He said he believed Stannard had identified a ‘legitimate loophole’ in the law, and it was a scheme that his friend had already succesfully used, passing the Revenue microscope.

Nelson also said he had nothing to do with the financial transactions between companies in the Stannard empire, and explained that his role was to identify the targets ripe for takeover and negotiate with the sellers.

Stannard was also banned from being a company director for nine years.

ends