Tax inspector was treated to night at Monte Carlo casino

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A tax inspector was given money to spend on a night out at a casino in Monte Carlo by a businessman who owed the Inland Revenue thousands of pounds in tax, the Old Bailey was told yesterday.

Michael Allcock was in charge of an investigation into Marwan Kalo, a Lebanese, who had invested in a brand of bottled mineral water in the 1980s, said John Black, for the prosecution.

Mr Black alleged that pounds 800,000 in remittances from abroad that the Revenue were interested in investigating were written off on Mr Allcock's orders "just like that".

Mr Allcock then allegedly agreed a pounds 50,000 tax settlement with Mr Kalo's representatives in London but suddenly asked if it could be made abroad. Arrangements were made for him to fly to Nice, in the south of France, where he was given "a very nice time" at the expense of Mr Kalo, alleged the prosecution.

After exchanging documents in Nice, lunch was paid for by Mr Kalo, who also met a hotel bill of more than pounds 1,000 for Mr Allcock.

That evening Mr Allcock was taken on a tour of Cannes, wined and dined, and then taken to a Monte Carlo casino where he and a junior colleague were given about pounds 200 of chips, said Mr Black.

Mr Allcock lost his money but his colleague won. When the taxman tried to give Mr Kalo the winnings, he was told to keep it, the court was told.

Mr Allcock, as head of a special office at the Revenue, had been entrusted to rake in taxes owed by "individuals of extreme wealth" like Mr Kalo.

But he was corrupted "by the huge wealth he saw before him", the prosecution alleged. Mr Black said the trip to Nice was completely unnecessary, as the settlement had already been agreed in England.

He said Christopher Furze, Mr Allcock's junior colleague, said there was nothing he could do to prevent it but he was unhappy about it.

Mr Kalo was "a man of substantial means who had not made full disclosures to the Revenue", said Mr Black.

He was suspected of being a "ghost", a term applied to foreign businessmen who failed to notify British authorities about their tax liabilities.

Mr Allcock's department, which was known as the Ghostbusters, received information about the businessman in December 1985 suggesting that Mr Kalo had invested in Highland Spring and had a property in Rutland Court, Westminster, London. But Mr Kalo's representatives argued he was employed by a foreign company and the London home was used by his family for holidays.

Mr Allcock handed the day-to-day investigation of the case to Mr Furze, although he kept overall control, said Mr Black.

It was discovered that Mr Kalo allegedly had pounds 1.3m deposited in a British bank account between 1981 and 1987. When shown this Mr Allcock allegedly said the Revenue had no case in relation to money from abroad and, in effect, wrote off the investigation.

These deposits were made up of transfers from overseas accounts and reimbursements from his friends and relatives and payments from Highland Spring and a Liechtenstein company.

"When shown this, Allcock said the Revenue had no case in relation to income from abroad. Mr Furze simply accepted the decision Allcock made for him. Allcock had summarily written off the investigation."

Mr Allcock, 47, of Colchester, Essex, denies 13 charges of corruption from June 1987 to October.