A British financier who lived in a chateau on the shores of Lake Geneva has been jailed for twelve and a half years for a £55m fraud described as "breathtaking both in size and audacity".
Ian Leaf, 51, was found guilty of carrying out one of the biggest tax swindles in Britain, in which he used a complex system of real and bogus companies.
The vast amounts of money he was able to accumulate were used to fund a luxury lifestyle that included a £5m, 10-bedroom chateau with a swimming pool, tennis court and paddock, at Gland in Switzerland. Leaf also illegally claimed £22m in tax rebates, but they were not paid.
The Inland Revenue and Customs and Excise took eight years and spent hundreds of thousands of pounds bringing the property tycoon to trial.
He fled Britain from his home in Buckinghamshire in the 1980s and found sanctuary in Switzerland, from where he ran his businesses. As well as his chateau, he owned a chalet in the ski resort of Verbier. He was well respected in his adopted home and was elected president of Verbier's Rotary Club.
He was detained in September 2000 when he flew into Ciampino airport near Rome on a privately chartered jet with his wife, Caroline, and his mother-in-law. He was arrested after officials noticed his passport had expired. After making inquiries, they discovered he was wanted in Britain for questioning about alleged tax fraud.
Leaf spent the next nine months in the Regina Coeli jail, near Rome, sharing a cell with murderers, armed robbers and mafiosi, but was released in May 2001 on bail on the condition that he stayed at a house on the outskirts of the Italian capital. He was due to hear whether he was to be extradited to Britain in July 2001 but, two weeks before the Italian courts ruled that he should be sent to England, he secretly returned to the safety of Switzerland.
He made his escape by taking a train from Rome to the Swiss border, where he picked up a guidebook and managed to hitch a lift - from an off-duty Italian tax inspector - to the foothills of the Alps. It took him a few hours to walk into Switzerland and sanctuary.
He was arrested in Switzerland in July last year after a long extradition battle and flown to Britain in November. He was convicted at Southwark Crown Court last month of 13 counts of fraudulent trading between 1991 and 1996.
The court heard that his multi-layered scam featured thousands of fictitious documents, a bank registered in Nauru, a Pacific island tax haven, and a firm of brokers that was little more than an address.
Passing sentence yesterday, Judge David Higgins told him: "In colloquial terms, that of which you have been convicted is fraud on a truly massive scale and of its type it may well be without precedence, and in the pantheon of crime it ranks very highly indeed. Put simply, you have by dishonest means deprived the Inland Revenue of approximately £55m, out of which you have made a net profit of approximately £22m. The whereabouts of this sum remains unknown."
Describing the defendant as a "constant criminal for many years" and one "entirely without remorse", the judge continued: "Your subterfuge involved an intricate and sustained web of deceit into which you drew individual and different firms of accountants and lawyers ... As to the figures themselves, they are breathtaking both in size and audacity." He said the crimes were "particularly pernicious and strike at the very heart of the financial structure of which social order so heavily depends".
The nine-week trial heard that at the heart of Leaf's wide-ranging dishonesty were 13 so-called "subsidiary" companies he had bought from parent concerns in such fields as construction, finance and trading. Investigators believe that of the £55m he in effect stole from the taxman, he used more than £30m to pay the Swiss bank loans he used to buy the various subsidiaries. Of the remainder, £22m has never been traced.
A confiscation hearing will be held next year.Reuse content