Rohan Pershad QC gets 3 1/2 years for £600k VAT fraud

pershard

Facts

Rohan Pershad QC, a barrister who used to practise from 39 Essex Street in London, was convicted on 11th February 2013 of cheating the public revenue.

Cheating the public revenue is a common law offence (as opposed to an offence defined by statute) which alleges the dishonest non-payment of VAT. It is crucial that the prosecution prove that a defendant has acted dishonestly in the non-payment of VAT in order to achieve a conviction.

It was alleged that Pershad failed to pay VAT on the sums he billed for his services as a barrister between 1 June 1999 and 24 September 2011, thereby cheating the public revenue. He claimed that he thought his chambers had indicated that his VAT liability had been taken care of.

HMRC considered Pershad to be a ‘missing trader’ after he left 2 Crown Office Row for 39 Essex Street.The Lawyer reported that he ‘dropped off the VAT radar’ and that following the verdict, HMRC revealed that Pershad was still filling out self-assessment forms, but used an invalid VAT number on invoices and pocketed the money himself rather than pay into the public purse. The forms showed that his income increased from £85,000 in 2001 to £346,000 in 2008.

Prosecutor Andrew Marshall of 18 Red Lion Court, said this had provided Pershad with a “private tax-free income of £600,000” and in that time he bought two homes – a property in Somerset for £490,000 and another in Virginia Water, Surrey, for £1,105,000.

The jury disbelieved Pershad and convicted him. Pershad received £624,579 which should have been paid to HMRC in VAT.

The CPS made a statement following the conviction. It is available here.

Sentencing powers of the court

As the offence is a common law offence, the maximum sentence is life imprisonment, however in reality, sentences fall far short of this.

There is no credit for a guilty plea and there is the highly relevant factor of the period over which the offence was committed.

When sentencing, the court can consider making the following orders:

  • Compensation Order
  • Confiscation Order
  • Financial Reporting Order
  • Deprivation Order
  • Disqualification from acting as the director of a company

Guidelines

The Fraud guidelines do not apply to the offence of cheating the public revenue, however in cases such as this the court can consider the principles of the Fraud guideline in relation to revenue fraud. This is, however only as a point of reference. Higher starting points than the revenue fraud guideline are generally considered to be applicable.

The revenue fraud guideline, for sums over £500,000 (note that the figures below are based on £750,000) states that:

Fraudulent from the outset and either fraud carried out over a significant period of time or multiple frauds starting point: 4 years custody range: 3-7 years custody

Not fraudulent from the outset and either fraud carried out over a significant period of time or multiple frauds: starting point: 3 years custody range: 2-6 years

Aggravating and Mitigating Factors

The CPS list the following as aggravating a mitigating factors:

  • The amount involved (here, a large sum, £600,000+)
  • The use to which money was put (spending on luxuries more venal than on necessities) (here, arguably on a lavish lifestyle, including buying houses)
  • Breach of position trust, such as by employee, director or trustee (not relevant)
  • Elderly or vulnerable victim (not relevant)
  • Extent of loss – intended and actual (large)
  • Extent of gain – intended and actual (large)
  • The period over which and the persistence with which the fraud was carried out (lengthy period – 13 years)
  • Guilty Plea (no guilty plea)
  • Voluntary repayments (unknown)
  • Personal factors such as illness, disability, family difficulties, etc (unknown)

Sentence

Mr Pershad was sentenced this morning at Blackfriars Crown Court, to 3 1/2 years’ imprisonment.

We had suggested here, with reference to the guidelines and case law, that the bracket might be in the order of 2-4 years.

With reference to the revenue fraud guidelines, we can see that it is likely that Mr Pershad’s actions were considered to be not fraudulent from the outset (therefore starting at 3 years). Further, it will be necessary to make a modest reduction to account for the fact that the sum obtained (£624,000) is below the figure on which the starting points are based (£750,000). It is then necessary to take account of the aggravating factors, including the use to which the money was put, the significant period of time over which the fraud was committed (although this is to some extent factored into the guideline, as you can see above) and the fact that the money was actually obtained (as opposed to an attempt). It is also necessary to inflate the sentence to take account of the fact this was cheating the public revenue – to which the guidelines do not apply (see above). As a result it is necessary to increase the sentence and in the absence of a guilty plea, that is perhaps how the sentence of 3 1/2 years was arrived at.

It is likely that the prosecution will seek confiscation proceedings to recover the sum deemed to be the proceeds of crime.

Appeal

Mr Pershad has stated that he intends to appeal both his sentence and conviction.

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5 thoughts on “Rohan Pershad QC gets 3 1/2 years for £600k VAT fraud

    1. Lyndon Harris Post author

      Hi David, Thanks for this – Interesting. Rohan Pershad was convicted of cheating the public revenue also. Clearly this is a wildly different set of facts than Mr Ravjani. 17 years is an extremely long sentence however. I don’t know of a longer sentence.

      Reply
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