Brothers who tried to steal £1m in a ‘staggering and audaciously dishonest’ film tax fraud have been jailed for a total of 14 years, the UK’s HM Revenue and Customs (HMRC) said in a statement on 8 April.
Craig Rees, 50, and his 52-year-old brother Carl submitted fraudulent Film Tax Relief (FTR) and VAT claims to HMRC.
The pair submitted inflated or completely made-up claims to HMRC for three separate films: Whispers, The Eight, and Violence.
In passing sentence Her Honour Judge Heidi Kubik KC, said they were convicted with overwhelming evidence which had revealed “staggering and audacious dishonesty.”
Craig Rees was sentenced in absence at Birmingham Crown Court today (8 April 2024), after absconding during the trial in January 2024.
To qualify for Film Tax Relief, at least 25 per cent of the production costs had to relate to activity in the UK at the time they made their claims between 2011 and 2015.
HMRC proved the pair’s claims were fraudulently inflated for the first film, which was moved to the United States. The second film was entirely made up, and the third movie was produced in the US purely to submit further fraudulent claims.
Mark Robinson, operational lead in HMRC’s Fraud Investigation Service, said: “Film Tax Relief is there to help genuine, honest film companies produce brilliant British films, but these brothers thought they could play the system for personal gain.
“We want to ensure there’s a level playing field for those who abide by the law and encourage anyone with information about any type of tax fraud to report it online.”
Following a referral from the British Film Institute (BFI), HMRC launched an investigation into the brothers’ claims and unpicked their web of lies, which included fictional expenditure on studios, sound recording and catering.
To present a façade of legitimacy, the duo, from Warwickshire, set up film production companies which provided forged documents to HMRC for both the FTR and VAT repayment claims.
In total they tried to steal £542,840 in FTR and £484,933 of VAT repayment claims over a four-year period from October 2011. In total they received more than £367,000 of the payments.
The men were found guilty on 11 March 2024 after an 18-week trial at Birmingham Crown Court.
Judge Kubik said Craig Rees had “ran away in the middle of proceedings” and ordered that when he is apprehended he is produced before her to be sentenced for absconding. Carl Rees told the court his brother was in Ukraine.
Anyone with information about the whereabouts of Craig Rees can contact HMRC online.
Craig Rees DOB: 10/01/1974, of Shakespeare Avenue, Warwick, was found guilty of two counts of conspiracy to cheat the public revenue. He was sentenced to seven years in prison at Birmingham Crown Court on 8 April 2024. He was also disqualified from acting as a director of any company for 15 years.
Carl Rees DOB: 23/05/1971, of Shakespeare Avenue, Warwick, was found guilty of two counts of conspiracy to cheat the public revenue. He was sentenced to seven years in prison at Birmingham Crown Court on 8 April 2024. He was also disqualified from acting as a director of any company for 15 years.
At the time of filming, companies could claim FTR if a film passed a cultural test and was considered a ‘British film’ by the British Film Institute (BFI), was intended for theatrical release, had at least 25 per cent of the total production costs related to activities in the UK, and the first day of principal photography had taken place on or after 1 January 2007.
