Road Haulage Boss Driven to Commit Fraud Banned for 11 years

Yet again, another director decides not to seek proper and timely insolvency advice.  Apparently committing tax fraud is a good way of solving financial problems!?  This has never been further from the truth.  An 11 year directorship ban with a suspended custodial sentence was not a good outcome and could have been worse.

David Cooper was a 55 year old former director of CFM Transport Ltd (CFMT), based in Chester Le Street, Tyne and Wear.

He had been a HGV mechanic and driver for around 30 years before seizing an opportunity to move into the road haulage business.  CFMT began trading in 2011.

The business grew and expanded into European markets and on advice, set up two further companies, CFM Cargo Logistics Ltd and CFM Continental Ltd.

In early 2015 one of the company’s vehicles was involved in an accident abroad.  This was where the unfortunate ‘madness’ began due to  business and cashflow difficulties being affected by the accident.  In order to keep the companies afloat while waiting for the insurance claim to be settled and the companies’ petroleum tax refund entitlements, Mr Cooper submitted false VAT claims.

Unsurprisingly his wrongdoing was discovered and with the prospect of criminal proceedings for tax-related fraud, he opted to cease trading.

During the liquidation process, the Insolvency Service looked in to Mr Cooper’s role in the collapse of the companies. Those investigations revealed that Mr Cooper had knowingly created and submitted false returns in order to claim VAT to which the company was not entitled.

On 8/10/2018, the Secretary of State accepted a disqualification undertaking from David Cooper.  He had admitted knowingly creating and submitting false returns to reclaim Value Added Tax to which the company was not entitled. His ban is effective from 29 October 2018 and lasts for 11 years.

The Insolvency Service take a very dim view of directors affecting the public purse and commented:

“The public can be assured that where there have been abuses of public finance provisions which result in losses of this type, the Insolvency Service will investigate the conduct of the parties involved and take action to remove the privilege of limited liability trading for a lengthy period.

Directors have a firm duty to ensure they deal properly with tax matters and pay what is due. Mr Cooper has paid the price for failing to do that, as he cannot now carry on in business other than at his own risk.”

In a separate investigation, Mr Cooper was convicted of “being knowingly concerned in fraudulent evasion of VAT”.  This amounted to £148,228 and on 15 June 2017 he was sentenced to 16 months imprisonment, suspended for 24 months.  Full text of the press release can be found here

Taking steps to keep a company afloat that does not involve seeking advice from a fully qualified, insured and regulated Licensed Insolvency Practitioner is just asking for trouble.  No matter how difficult it might be to accept that a company may need to go into liquidation, the sooner it happens the better off a company director will be.

Lucas Johnson Limited are licensed insolvency practitioners and work with company directors to pro-actively manage financial difficulties.  In managing those financial difficulties recommendations may be made to place the company into liquidation, administration or even a CVA.  If you feel you are at the point where cashflow is tight or the financial position could be better, contact us on 0330 900 2000 for a free confidential discussion that may avoid you taking steps as drastic as David Cooper.