Three brothers, who stole £3m in a tax scam involving pubs and restaurants, have been jailed.
Bournemouth brothers Shahab Hashtroudi, 64, Shahin Hashtroudi, 58 and Hedayat Hashtroudi, 68, ran pubs and restaurants in Hampshire, Dorset and Surrey, using the money to prop up their loss-making business empire and fund their lifestyle. Shahab Hashtroudi drove a Porsche and sent his child to private school.
From October 2008 they set up 11 companies, all of which failed leaving huge debts. None of the companies lasted longer than 24 months, with some trading for less than a year.
Some failed to pay a single penny in VAT to HMRC, while stealing the Income Tax and National Insurance contributions of their employees.
Their bookkeeper Tracy Carder, 42, of Poole, Dorset, enabled the fraud to continue by lying to HMRC about the companies’ true tax liabilities. Her actions helped extend the life of some of these companies and allowed for further substantial amounts of VAT, tax and National Insurance to be fraudulently evaded.
Richard Wilkinson, assistant director, fraud investigation service, HMRC, said: “The Hashtroudi brothers were serial offenders in setting up businesses and ripping off the British taxpayer, by pocketing the Income Tax and National Insurance contributions employees had paid and also VAT on sales. The money they failed to declare is the equivalent to the starting salaries of 165 nurses for a year.”
The Hashtroudis’ operated several restaurant firms including Alcatraz Dining Group, Alcatraz Pub Company, Alcatraz Restaurant Company, Alcatraz Wine and Beer Company Ltd, as well as several restaurant businesses under the 8 Rivers, Apricot and Candy Experience names.
HMRC launched an investigation into the brothers after Apricot failed in similar circumstances to their previous businesses.
Investigators found that taxpayers’ money was instead being used to maintain the family’s assets, as well as paying commercial mortgages, with the Hashtroudis’ homes at risk if they failed to keep up the payments.
Once the firms had been declared insolvent, they started trading again under a new name leaving hundreds of thousands of pounds of debt to HMRC behind.
After being disqualified as company directors, the brothers then became ‘shadow’ directors, pulling the strings behind the scenes.
The group of four were found guilty of cheating the public revenue of £3 million after a seven-week trial at Southampton Crown Court. Shahab was also found guilty of tax fraud with Candy Experience Ltd (formerly 8 Rivers Bars Ltd).
Shahab Hashtroudi was given a six year jail sentence, Shahin Hashtroudi four years and Hedayat also four years. Carder received a two year jail sentence, suspended for two years, and was ordered to do 300 hours of unpaid work.
The Hashtroudis were also banned from being directors for a total of 28 years.
In sentencing the quartet, His Honour Judge Henry described Shahab Hashtroudi as the “orchestrator” of the fraud and “the power behind the throne.” He said: “You involved others in this fraud by pressure, by persuasion, by force of personality or by playing on the desire of some to keep their jobs.”
Confiscation proceedings are underway to recover the proceeds of the crimes.