Big Tax Fraud Shows Lax Attitude to Trading Airtime

Plymouth Live reports that a businessman has been banned by British authorities from being a company director after his firm failed to pay GBP7mn (USD8.4mn) in taxes and penalties incurred by a GBP43mn (USD52mn) deal for telecoms airtime. Michael Anthony Lamden was the sole director of MY.KLT Ltd, which was incorporated in 2014 and which landed an extraordinarily large deal in mid-2015. However, all of the transactions undertaken by MY.KLT were traced back to a fraudulent defaulter. This left Lamden liable because of his failure to impose adequate checks on his trading partners. As a consequence, Lamden is not permitted to be the director of another company for 12 years.

The authorities noted the extent to which Lamden had been guilty of a lazy attitude to preventing fraud.

The Insolvency Service said: “In his undertaking Michael Lamden does not dispute that, between 1 June 2015 and 29 June 2015, he caused the company to participate in transactions that were connected with the fraudulent evasion of VAT, such connections being something which he either knew or should have known about.

Despite being aware of VAT fraud in MY.KLT’s trade sector and engaging in transactions bearing the features of such fraud, he failed to ensure that MY.KLT carried out effective steps, checks and/or due diligence in respect of its trade and of its trading partners.

Lamden was also guilty of wishful thinking.

The Insolvency Service website said: “Despite being a start-up company with a sole director and no employees, MY.KLT managed in two months to generate a purported trade of £43,273,566.”

“HMRC think that the reasonable business person would find this too good to be true.”

Lamden also neglected to keep the tax authorities appraised of what was happening.

Case details on the Insolvency Service website, said… “He forgot to inform HMRC of the £43million trade when meeting with HMRC Officers on 29 June 2015.”

The failings of Lamden and his business illustrate why all telcos need to perform comprehensive checks on the businesses with which they trade.

Plymouth Live’s article about Lamden and the fraudulent trade can be found here.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.