A Chinese restaurant owner who fraudulently claimed more than £100,000 in VAT repayments has been jailed – after HM Revenue and Customs (HMRC) noticed his forged invoices contained spelling mistakes.

David Ying Chung Lai, 50, of Doncaster Road, Jesmond, submitted documents to HMRC that appeared to show he had spent over £700,000 on renovations to Newcastle city centre restaurants Mangos and Aura.

But during a routine visit to Lai’s premises, in March 2012, a HMRC compliance officer spotted a series of spelling errors on invoices that not only looked unprofessional, but were ‘remarkably’ similar to each other, despite purporting to be from different companies.

Diane Donnelly, Assistant Director, 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.

“I urge anyone with information about individuals or businesses involved in tax fraud to contact the HMRC Tax Evasion hotline on 0800 788 887.”

One invoice, for electrical rewiring and the fitting of a new kitchen floor totalling £45,000, appeared to be from a legitimate company based at Mariner’s Wharf in Newcastle. Lai, however, had incorrectly copied the address as ‘Marines’ Wharf. On the forged letterhead, he had typed ‘Limtied’ instead of ‘Limited’.

Further checks revealed another supposed supplier, CM Joiners and Shopfitters, did not exist, and that Lai had assigned the fictional company an address that belonged to a supermarket in Edinburgh.

Lai pleaded guilty to the fraudulent evasion of VAT, totalling £107,775, and to the possession of fraudulent documents at Newcastle Crown Court on 27 February 2015. He was sentenced to 20 months in prison by his Honour Judge Camp at Newcastle Crown Court today, September 1 2015.



Notes to editors

David Ying Chung Lai, Doncaster Road, Jesmond, Newcastle upon Tyne. DOB: 21/05/1965 Follow HMRC on Twitter @HMRCgovuk HMRC’s Flickr channel www.flickr.com/hmrcgovuk

Issued by HM Revenue & Customs Press Office

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