Glasgow Restaurateurs Sentenced to Three Years for Major VAT Fraud
Two restaurateurs from Glasgow have been handed three-year prison sentences after orchestrating a substantial VAT fraud totalling nearly £700,000. Antonio Carbajosa, aged 41, and Kevin Campbell, aged 44, operated a collection of popular venues in the city, including Cranside Kitchen and Halloumi. Their fraudulent activities were uncovered following a meticulous investigation by Her Majesty's Revenue and Customs (HMRC).
Coordinated Fraud and Guilty Pleas
Carbajosa and Campbell pleaded guilty to the fraudulent evasion of VAT amounting to £682,882, which occurred between November 2011 and October 2016. The High Court in Glasgow heard that the pair acted together in a coordinated manner to execute this lucrative scam. They systematically suppressed the true sales figures for their limited companies, which included Cyprus Leisure, Rotunda Leisure, Lookoil, Catering 58, Beachfront, Seaside 41, South Promenade, and La Reguera.
By underreporting sales, the companies appeared more profitable than they actually were, enabling them to finance operational costs such as staff wages from income that should have been allocated to HMRC. Additionally, Carbajosa and Campbell were able to extract greater personal income from the businesses than would have been possible under legitimate circumstances.
Accountant's Involvement and Political Connections
In a related development, their accountant, Khalid Javid, 67, admitted to recklessly making a false statement. Javid, a prominent supporter of Scottish independence who has been photographed with leading SNP figures including former First Minister Nicola Sturgeon, managed the VAT returns and other financial matters for the businesses through his firm, KA Javid & Co. This included handling PAYE, corporation tax, and annual returns to Companies House.
The details of Javid's involvement were withheld from public reporting until his case was resolved. He had been scheduled to stand trial but instead pleaded guilty yesterday. Advocate depute Wojciech Jajdelski stated that HMRC suffered a total loss of £136,576 due to Javid's actions. Sentencing for Javid has been deferred pending background reports, with bail granted by Judge Lord Young until next month.
Investigation and Legal Proceedings
The fraud was initially detected when HMRC identified discrepancies in VAT returns from two of the businesses, prompting a forensic accounting report. Mr Jajdelski emphasized that all relevant companies had annual VAT turnovers significantly exceeding the registration limits for those years. Furthermore, three of the companies were not registered for VAT at all and failed to pay tax on their sales.
The Crown accepted that the total fraudulent evasion by Carbajosa and Campbell amounted to £682,882. Mr Jajdelski highlighted that both men were fully aware that the sales information provided in their VAT returns was false, underscoring the deliberate nature of their deception.
This case serves as a stark reminder of the serious consequences of tax evasion, particularly within the hospitality sector, and underscores HMRC's commitment to pursuing such financial crimes rigorously.
