Three brothers, who stole £3m in a tax scam involving pubs and restaurants, have been jailed and banned from being directors for 28 years.
Bournemouth brothers Shahab Hashtroudi, 64, Shahin Hashtroudi, 58 and Hedayat Hashtroudi, 68, ran pubs and restaurants in Hampshire, Dorset and Surrey, using the money to prop up their loss-making business empire and fund their lifestyle. Shahab Hashtroudi drove a Porsche and sent his child to private school.
From October 2008 they set up 11 companies, all of which failed leaving huge debts. None of the companies lasted longer than 24 months, with some trading for less than a year. Some didn’t pay VAT to HMRC, while also stealing the income tax and national insurance contributions of their employees.
Their bookkeeper Tracy Carder, 42, of Poole, Dorset, enabled the fraud to continue by lying to HM RC about the companies’ true tax liabilities. Her actions helped extend the life of some of these companies and allowed for further substantial amounts of VAT, tax and national insurance to be fraudulently evaded.
Richard Wilkinson, assistant director, Fraud Investigation Service, HMRC, said: “The Hashtroudi brothers were serial offenders in setting up businesses and ripping off the British taxpayer, by pocketing the income tax and national insurance contributions employees had paid and also VAT on sales. The money they failed to declare is the equivalent to the starting salaries of 165 nurses for a year.”
The Hashtroudis’ firms went under the names of:
- Alcatraz (including Alcatraz Dining Group Ltd, Alcatraz Pub Company Ltd, Alcatraz Restaurant Company Ltd and Alcatraz Wine and Beer Company Ltd)
- 8 Rivers (including 8 Rivers Inns Ltd, 8 Rivers Restaurants Ltd, 8 Rivers Pub Ltd)
- Apricot (including Apricot Pub Company Ltd and Apricot Restaurant Ltd)
- Alcatraz Group Ltd (formerly 8 Rivers Dining Ltd)
- Candy Experience Ltd (formerly 8 Rivers Bars Ltd).
HMRC launched an investigation into the brothers after Apricot failed in similar circumstances to their previous businesses. Investigators found that taxpayers’ money was instead being used to maintain the family’s assets, as well as paying commercial mortgages, with the Hashtroudis’ homes at risk if they failed to keep up the payments.
Once the firms had been declared insolvent, they started trading again under a new name leaving hundreds of thousands of pounds of debt to HMRC. After being disqualified as company directors, the brothers then became ‘shadow’ directors.
The group of four were found guilty on 15 January 2019 of cheating the public revenue of £3m after a seven-week trial at Southampton Crown Court. Shahab was also found guilty of tax fraud with Candy Experience Ltd (formerly 8 Rivers Bars Ltd). They were sentenced at the same court on 1 February 2019.
Shahab Hashtroudi was given a six year jail sentence, Shahin Hashtroudi four years and Hedayat also four years. Carder received a two year jail sentence, suspended for two years, and was ordered to do 300 hours of unpaid work.
Judge Henry described Shahab Hashtroudi as the “orchestrator” of the fraud and “the power behind the throne.” He said: “You involved others in this fraud by pressure, by persuasion, by force of personality or by playing on the desire of some to keep their jobs.”
Confiscation proceedings are underway to recover the proceeds of the crimes.