Fraudster took money to ‘try and rebuild’ life

James Heaney

James Heaney

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A Derry accountant who admitted fraudulently taking more than £55,000 given to him by the directors of a local fast food restaurant to pay their VAT bill was ‘trying to rebuild his life’ following the failure of his earlier business ventures, the city’s Crown Court has heard.

At a sentencing hearing today, the court was told how Heaney had committed the offences between October 2011 and February 2013 - when he had contacted HMRC himself to let them know he had filed inaccurate VAT reports on behalf of a company registered as 2 Strand Rd Ltd and trading as Hillbillies’ Chicken.

He told an officer of HMRC that he was an accountant and was responsible for filing VAT returns on behalf of the company - and that he had received money from the company to cover the bills.

However on three occasions he had submitted returns showing a lower liability - and had retained the difference, transferring it to his business account.

He told HMRC that the outstanding difference was in the region of £53,740 - although the real figure was found to be in excess of £55,000.

Following Heaney’s admission, a full investigation into his financial affairs was launched and further offences were discovered, including the fraudulent claiming of Tax Credits on two occasions and providing fraudulent information ot Lloyd’s Bank on two occasions when making mortgage applications in the name of his son and daughter.

Heaney further told Lloyd’s Bank that the two properties purchased in his children’s names were to be used as residential properties, when they were, in fact, being let out.

In relation to the fraud surrounding his filing of VAT returns for Hillbillies’ Chicken - the court heard that Heaney was a friend of the owners and had agreed to register their company for VAT and file their returns.

When he registered the company, he listed himself as company director - without the knowledge or permission of the owners. Prosecution barrister Russell Connell QC told the court this served a dual purpose. It meant that the HMRC would only deal with Heaney in relation to VAT payments and would not divulge any information about the VAT returns to anyone but Heaney.

The court heard on the first occasion in 2012, Heaney was given £22,300 to cover VAT expenses, but submitted a return stating the company owed £2,686 in VAT. He placed the remaining £19.614 in his own account.

On the second occasion, he paid a VAT liability of £1880, retaining £18,176 of monies given to him by Hillbillies.

And on a third occasion he paid a VAT liability of £4120 when the actual figure due was £22,070.

On each occasion Heaney had drawn a line through the original payee instructions on cheques issued to him and added his business account details instead.

Examinations of his personal accounts showed money being moved from his business account to other accounts, with money being used on two occasions to fund deposits for the properties he bought in the name of his son and daughter.

In claiming Tax Credits, Heaney first of all declared a household income of £4,482 for 2011/2012, when his income had been £28,000 - resulting in an Tax Credit overpayment of £4000.

On a second occasion, Heaney declared a household income of £4105, when it had been £39,707.70 - resulting in a Tax Credit overpayment of £9000.

Mr Connell, QC, said the offending pattern showed clear evident of pre-meditation and was a breach of trust, which given his position as an accountant must be given serious consideration when sentencing.

He described Heaney’s offending as “serious and systematic”.

Defending, Mr Paul Foster said his client had experienced severe difficulties in the past when his business, a tyre disposal company, had gone bust.

Mr Foster said Heaney had invested his life savings and all the equity in his house into the business and when it had failed he was left “penniless”.

“He had no money whatsoever, was declared bankrupt and his house was repossessed.”

Mr Foster said Heaney had gone from living a relatively comfortable lifestyle to being completely broke and had been trying to rebuild his lifestyle.

The 46 year old had returned to university and studied Business and Finance. “It is entirely possibly he wanted to accelerate the speed with which he was rebuilding his life for his family,” Mr Foster said.

He added that his client accepted their was no sophistication in his offending and that he accepted that “at some stage he was going to get caught”.

“This was a man who had lost everything - and maybe he just wanted to rebuild his life too fast,” Mr Foster said, saying the whole affair had left Heaney “beside himself”.

Sentencing was adjourned until Wednesday of next week to allow time for further legal submissions.