The fraudsters set up partnerships to produce films called 'Starsuckers' and 'Mercedes the Movie'.
The investigation by HM Revenue and Customs, identified accountant Terrance Potter, 55, as the “architect of the fraud”.
He was assisted by independent financial adviser, Neil Williams-Denton, 42, who also promoted the schemes to high earning investment bankers.
Williams-Denton, from Greater Manchester, was an independent financial adviser for Greystones Financial Services at the time of his arrest in 2012.
He was convicted in September 2015 of one count of Conspiracy to Cheat the Public Revenue and then found guilty on a second count in December 2015. He was sentenced to six years imprisonment for each count to be served concurrently.
Three investment bankers, Phillip Jenkins, 51, James Hyde, 43, and Hamish MacLellan 43, were each convicted of one count of Conspiracy to Cheat the Public Revenue, and sentenced to thirteen and half years in prison, collectively at a previous trial.
In the latest trial, two independent film producers, Chris Walsh Atkins, 40, and Christina Slater, 37, were convicted of Conspiracy to Cheat the Public Revenue, theft and fraud and sentenced to a total of nine years in prison today (Friday 1 July 2016). Their role in the fraud was to circulate money and produce falsely inflated invoices.
The scheme involved claiming false tax rebates linked to contrived investments in film-making partnerships.
The partnerships claimed to have spent £5.7 million and made significant financial losses on two UK film projects, ‘Starsuckers’ and ‘Mercedes the Movie’.
These artificial losses enabled the wealthy investors to falsely claim back around £40,000 in tax relief for every £20,000 they had invested.
HMRC identified a series of suspicious tax rebate claims, which investigators discovered had originated from two fraudulent tax avoidance schemes.
Simon York, director of HMRC’s Fraud Investigation Service, said:
“This was an audacious attempt to defraud HMRC and was motivated by the pure greed of dishonest and wealthy individuals. The majority of those involved in this fraud had no interest in the film industry, or regard for the impact of their criminality on honest taxpayers.
“After painstaking and complex work from our investigators, and a series of long trials, HMRC has dismantled the fraudulent operation, and shown that we have the intent and capability to bring criminals to justice regardless of their resources. The long sentences handed down send a powerful message to those tempted to deceive HMRC. Nobody is beyond our reach.”
Potter not only devised and promoted the schemes to wealthy professionals, he produced false documents in a bid to make the schemes look legitimate, according to HMRC.
More than 100 officers from HMRC took part in the operation that led to the arrests in February 2012. Eighteen properties were searched and computers, business records and mobile phones were seized.
The majority of the tax refunds claimed by investors were withheld and £500,000, which had been paid out initially, has since been recouped by HMRC.
Investigations to recover further proceeds of the crime are under way, officials added.