'Greedy' businessmen swindled £3.2 million after sale of Wakefield housing land

Brothers Stephen and Michael Hirst attempted to conceal the cash, having sold the land off Park Drive in Lofthouse to an offshore company that they also owned, then to a developer for £11 million and making a “vast profit”, but failed to pay any tax, Leeds Crown Court heard.

Prosecuting on behalf of His Majesty’s Revenue and Customs (HMRC), Samuel Green said the greedy pair used foreign companies they had set up to move money about in a “desire to keep a shroud of secrecy”.

In a last-ditch effort to keep the cash, they even “invented” an elaborate lie that the proceeds did not belong to them, but to an Iranian business partner who had died.

The pair received suspended sentences today after paying back the money they owed, along with costs. They admitted one count of cheating the public revenue, but only after their trial had begun.

The court heard that the pair had been directors of Heritage Holdings Ltd that bought the plot of land from Leeds City Development Company in August of 1999 for £740,000. It later became the Lofthouse Park development.

In 2003, TIMS Investment Ltd was registered in Gibraltar by the defendants. In September 2004, they sold part of the land from Heritage to TIMS for £60,000 plus VAT - a “fraction of its value”, Mr Green said.

They also set up another TIMS in the British Virgin Islands in 2005, with plans to transfer money to “avoid scrutiny further”.

The land off Park Drive was then sold to the legitimate housing developer for almost £11 million in July 2007. Mr Green said: “They [the Hirsts] made a vast profit. Tax liability should have been a little over £3.2 million. However, that sale was never declared to HMRC.

“They could have declared that tax, they still would have made a profit of £7 million. It amounted to cheating the revenue. They had ample opportunity to declare their liability arising but they refused to do so.”

He said that HMRC later began looking into the tax affairs of the brothers and their attempt to conceal the sale of the land. Mr Green said they had left a paper trail which allowed investigators to uncover their dodgy dealings.

But having been approached by HMRC, in 2018 they then claimed that TIMS was originally set up to help out the Iranian businessman they had first met in Zimbabwe in 1999 and been working with. They said that that businessman did not want to keep his money in Iran or Zimbabwe, so they became “nominee directors” for TIMS and the money belonged to the Iranian.

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Mr Green said it was their “last throw of the dice” to escape liability. After being charged in 2021, they finally admitted the offence part-way through their trial last year. They were told to pay back £3,247,613. They have since paid back the money, plus £31,000 prosecution costs.

Michael Hirst, age 55, of Barnsley Road, Newmillerdam, has no previous convictions. Mitigating on his behalf Abbas Lakha said he had “always been a grafter” and had been a successful businessman in Zimbabwe.

He claimed that it was “bad business advice that led them to the dock”. He said they had embarked on a “perfectly legitimate” tax-avoidance measure but it did “not excuse what they did”.

He said: “The reality is they did act criminally, but they did not set about intending it to be criminal. They thought the advice they were given was legitimate. Having started down that road, they were in too deep.”

Stephen Hirst, age 62, formerly of The Nook, Tingley, but now of Marton Gate, Bridlington, has two previous conviction for handling stolen goods and failing to comply with environmental regulations. Mitigating on his behalf, Gulam Ahmed said he had suffered from both mental health difficulties and significant physical problems.

He said that his son had died in 2021 and was taking anti-depressants.

Judge Mushtaq Khokhar told both: “It was sustained fraudulent conduct on your parts. You could have been left with £7 million, but the greed had got the better of you.”

He said the sentence was reduced because they had paid back the cash. Both received a two-year sentence, suspended for two years. Stephen Hirst was ordered to pay a £12,000 fine, and Michael Hirst to pay an £8,000 fine.

They were both banned from running a company for the next eight years.