Siblings made up movie in £1m film tax fraud

Siblings made up movie in £1m film tax fraud

Apr 15, 2024

Brothers who tried to steal £1,027,773 in a ‘staggering and audaciously dishonest’ film tax and VAT fraud have been jailed for seven years

Craig Rees, 50, and his 52-year-old brother Carl made fraudulent film tax relief and VAT claims to HMRC. They were found guilty of two counts of conspiracy to cheat the public revenue at Birmingham Crown Court after an 18-week trial in March and have each been sentenced to seven years in jail.

Craig Rees was sentenced in absence at Birmingham Crown Court after absconding during the trial in January 2024. His brother claimed he had fled to Ukraine.

The pair submitted completely made-up claims to HMRC for three separate films: Whispers, The Eight, and Violence.

In passing sentence Judge Heidi Kubik KC, said they were convicted with overwhelming evidence which had revealed ‘staggering and audacious dishonesty’.

To qualify for film tax relief at least 25% of the production costs had to relate to activity in the UK at the time they made their claims between 2011 and 2015.

HMRC proved the pair’s claims were fraudulently inflated for the first film, which was moved to the US. The second film was entirely made up, and the third movie was produced in the US in 2015 purely to submit further fraudulent claims.

The third film, Violence, was a psychological drama and featured Craig Rees himself, as well as Veronica Lavery and Hayley J Williams.

Rees was a jobbing actor and had appeared in an episode of Friends as a waiter and the X-Files as a police officer, both in uncredited roles, and described himself as a film director and producer. His most recent project was a slasher horror version of Goldilocks and the Three Bears, where he is listed as a director.

Following a referral from the British Film Institute (BFI), HMRC launched an investigation into the brothers’ claims and unpicked their web of lies, which included fictional expenditure on studios, sound recording and catering.

To present a façade of legitimacy, the duo, from Warwickshire, set up film production companies which provided forged documents to HMRC for both the film tax relief and VAT repayment claims.

In total they tried to steal £542,840 in film tax relief and £484,933 of VAT repayment claims over a four-year period from October 2011. They received more than £367,000 of the payments before HMRC launched the investigation and put a stop to any payouts.

Judge Kubik said Craig Rees ‘ran away in the middle of proceedings’ and ordered that when he is apprehended he is produced before her to be sentenced for absconding. Carl Rees told the court his brother was in Ukraine.

Mark Robinson, operational lead in HMRC’s fraud investigation service, said: ‘Film tax relief is there to help genuine, honest film companies produce brilliant British films, but these brothers thought they could play the system for personal gain.

‘We want to ensure there’s a level playing field for those who abide by the law and encourage anyone with information about any type of tax fraud to report it online.’

Both Rees brothers were also disqualified from acting as a director of any company for 15 years.