Tax fraud charges dropped

05 Apr 2018

Following a full and objective review of the tax fraud charges against Richard Hughes in December 2016, the Crown Prosecution Service has confirmed that all charges have now been dropped.

The charges, which were dismissed in May 2017, were unlawfully brought before the court due to a number of improper acts on part of the prosecution. The CPS has admitted that HMRC pursued the case in the face of a fundamentally flawed investigation, having failed to properly apply the Criminal Procedure and Investigations Act 1996.

It has also been accepted that there were failures to follow reasonable lines of inquiry during the course of the investigation. This includes a stark failure to pursue lines of inquiry involving three former employees at HSBC that emerged in the early stages of the investigation, which dates back to 2010. Neil Bowman, Guy Surtees and Mark Williams (formerly HSBC) have now been interviewed under caution for their role in devising a tax scheme.

The CPS accepted that the charging decision was premature and that not all available material was properly considered at the time the charges were brought.

Richard Hughes: “Answers need to be given as to why an unlawful prosecution was allowed to proceed. The internal investigations being carried out within both HMRC and CPS need to be open and transparent to ensure that this doesn’t happen again. The admissions of a fundamental failure to follow reasonable lines of enquiry, wholesale failures in the disclosure process and a premature charging decision show systemic failings at every level of both the CPS and HMRC and that needs addressing.

“I expect the internal investigation to be open and transparent and urge Simon York and Alison Saunders to publish the findings of these investigations so this does not happen again.”

Anthony Barnfather, solicitor, a leading regulatory investigation expert, who represented Richard Hughes, said: “In defending serious fraud cases for 20 years I have only on one previous occasion uncovered such systematic failings. The grave admissions now made by the prosecution are unprecedented. It deeply concerns me that reviewing lawyers and team leaders failed to pick up on serious breaches of codes of practice much earlier. We had to force these admissions and my guess is that we have only seen the tip of the iceberg so far. My views are well known, this case should never have been prosecuted. The costs to the public purse will run into many millions of pounds.”

Tom Handley, Director of Chambers at Barristers’ Chambers, Exchange Chambers put together Richard Hughes’ defence team.

He said: “From the very beginning, Richard’s legal team at Chambers have maintained that the case against him, and his co-defendants, was fundamentally flawed.

“After the charges were dismissed last year, the only procedure available to the Crown to keep the case going was a voluntary bill of indictment.

“The voluntary bill of indictment procedure is available when there is new evidence, there has been a serious procedural irregularity, the judge has erred in law, or it is in the interests of justice to grant it.

“The CPS has now confirmed it does not intend to seek a voluntary bill of indictment meaning the final legal hurdle has been cleared and Richard can move forward without these charges hanging over him.”

The CPS has commissioned an internal investigation into the conduct of this case, while HMRC has appointed an internal governance team to conduct a review as to why this flawed prosecution was brought to the court in the first place.