Spelling mistakes snared Chinese restaurant owner in £100,000 VAT fraud

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A business man who fraudulently claimed nearly £100,000 in VAT repayments for renovations that didn’t take place has been jailed.

David Lai, 50, who ran the Mangos and Aura Chinese restaurants in Newcastle claimed £93,862 in VAT repayments - but was caught after his fake invoices were seen to have grammatical errors and mistakes in them.

Newcastle Crown Court heard today that Lai, of Doncaster Road, Newcastle, was managing director of three separate companies, Wellcourt Ventures, Longfield Leisure and Bayston Solutions and had claimed to be making refurbishments through them from 2008 up to 2012.

When a customs officer visited Aura, in the city quadrant of Newcastle, in March 2012 to have a look at the refurbishment but saw no workmen, Lai told the officer that the builders worked different hours.

Stephen Duffield, prosecuting said: “When the customs officer asked to look at Mr Lai’s VAT records he showed him a hand written notebook.

“The officer became suspicious after noticing that the invoices contained spelling mistakes and other grammatical errors and incorrect addresses.”

Mr Duffield said that Lai claimed the invoices were from different companies but the inspector realised they all looked very similar to each other.

He added that one address that supposedly belonged to a shop-fitter included in the invoice was actually that of a Tesco’s supermarket in Edinburgh.

Anthony Davis, defending, said: “This is a case of a businessman taking his eye completely off the ball and being taken advantage of by workmen who were submitting the faked invoices.

“He does accept that as he was the managing director of these companies he must take responsibility.

“At the time he was suffering with personal problems as he had recently divorced from his wife of 15 years and was in a deep depression.

“He has suffered a heart attack more recently and will most definitely need open heart surgery in the near future.”

The court heard how Lai – who has worked in the past as an accountant and has an economics degree - has become an outcast in the tight knit Chinese community that he is a part of as a result of his actions.

Lai, who was charged with VAT fraud and submitting false invoices, pleaded guilty at a previous hearing.

Sentencing Lai to 20 months in prison Judge Paul Camp said: “You haven’t shown very much remorse and when the VAT inspector showed up, had you been frank then, you would not have appeared before this court.

“Instead you have contented that what you did was not dishonest. You are a man of more or less good character but having an Economics degree and trained as an accountant, you must have had a pretty good idea that what you were doing was dishonest.”

After the case assistant director Diane Donnelly, of the Fraud Investigation Service, HMRC, said: “Lai bungled his way through this fraud until HMRC inevitably caught up with him.

“Today’s sentence sends out a clear message to those who might be involved in this type of fraud: if you steal public money from honest, hard-working law-abiding people, we will prosecute you, and you will pay the consequences.”