Andrew Smith launched a surfboard business, installing microchip trackers
He tried to get interest from Dragon's Den star Richard Farleigh
But business began to fail and Smith started faking his VAT claims
Five years later he was involved in £270,000 VAT racket, faking invoices
Cardiff Crown Court heard most of his income in 2013 was from taxman
HMRC exposed fraud and Smith, a father of three, was jailed for 20 months
Smith said he had been caring for his wife at the time, who had cancer
An
entrepreneur who founded a surfboard tracking business has been jailed
after he faked VAT claims for £270,000 when his business failed.
Surfer
Andrew Smith, of Newport, South Wales, launched his business putting
tracking chips into surfboards and even tried to attract investment from
Dragon's Den star Richard Farleigh.
But the business, called surfboardtracker.com, began to fail and Smith started making false VAT claims in a £270,000 racket.
Andrew Smith has been jailed after it emerged he was involved in a £270,000 VAT scam as his business failed
Five years
later most of the father-of-three's income was coming directly from the
taxman, after Smith faked invoices and bank statements.
The
scam was referred to as a 'ticking time bomb' and was was exposed after
he gave an officer from HMRC fake invoices, claiming he had spent tens
of thousands of pounds on microchips at a time when the business was
making sales of less than £5,000.
Smith has been left penniless and was jailed for 20 months after he admitted fraud.
Cardiff Crown Court heard that Smith hoped to make a fortune by launching a business putting tracking chips into surfboards.
The
business sold microchips to the surfing and extreme sports community to
allow their equipment to be tracked if it was stolen.
In
2008 a spokesman for Mr Farleigh's company was quoted as saying:
'We're investing as much in Andrew as in the idea. He's so
enthusiastic. We almost have to hold him back sometimes.'
But
Mr Farleigh has told MailOnline that, though he did have 'preliminary
discussions' about investing in the company, he did not put any money
into the venture.
Five years later Smith's VAT fraud was exposed.
The
court was told an officer from HMRC met with Smith in April 2013 to
check over his claim for VAT repayment for buying parts from a foreign
supplier.
He gave her invoices showing that in March 2013 he had spent £45,748.25 on microchips from a company in Germany.
Yet investigations showed that the invoices were faked and the company had never had dealing with Surfboardtracker.com.
At the time the company was making just £5,000 in sales.
HMRC
then discovered bank statements, which had been submitted by Smith,
were also falsified and most of his income was coming from the taxman.
Prosecutor Nuhu Gobir said: 'It didn't appear the defendant was running a legitimate business.'
Smith,
of Newport, South Wales, told officers his wife had been diagnosed with
cancer in August 2008 and from that date he worked from home and became
her carer until she recovered.
He
said: 'I'm going to be honest with you. Some of these numbers, they
have been messed up, I have fabricated them. I'll hold my hands up.'
He
admitted the invoices and bank statements were false and had been
created on his computer and that the information in his VAT returns was
not correct.
Chris Rees, defending Smith, described his scam as being a 'ticking time bomb'.
'It was a matter of time before he was discovered,' said Mr Rees.
It was a
legitimate business to start off with, albeit a business that failed. It
was at one stage a business regarded as highly promising,' he added.
Mr Rees said it should be noted that Smith committed the fraud to pay for his family and home, not to live in luxury.
Smith had admitted being knowingly concerned in the fraudulent evasion of VAT.
Jailing
Smith for 20 months, Recorder Ian Murphy said he accepted the 'genesis'
of him beginning the fraud was his wife's illness.
'It was an extremely aggressive form of cancer that had a dramatic impact on her health,' he said.
No application was made to recoup the £273,000 because Smith has no assets.
An
earlier version of this story stated that Richard Farleigh invested
£60,000 in surfboardtracker.com. In fact, while Mr Farleigh considered
investing in the company, he did not put any money into the venture. We
are happy to clarify this.
