The Attorney General v Martin Guy Webster

ROYAL

COURT (Samedi Division) 23rd April, 1998 Before: F.C. Hamon, Esq., Deputy Bailiff, and Jurats Le Ruez and Quérée The Attorney General -v- Martin Guy Webster Sentencing by the Inferior Number of the Royal Court, following an admission of the facts on 17th April, 1998, on the following counts: 12 counts of contravening Article 137 (1)(a) of the Income Tax (Jersey) Law, 1961, by negligently delivering to the Comptroller of Income Tax a statement required by Article 16 of the said Law, which was incorrect: Count 1: for year ending 31st December, 1984: omitting to declare income of £3,733, arising from royalties and investments. Count 3: for year ending 31st December, 1985: omitting to declare income of £5,220, arising from bank interest, royalties and investments. Count 5: for year ending 31st December, 1986: omitting to declare income of £4,804, arising from bank interest, royalties and investments. Count 7: for year ending 31st December, 1987: omitting to declare income of £3.484, arising from bank interest, royalties and investments. Count 9: for year ending 31st December, 1988: omitting to declare income of £4,192, arising from bank interest, royalties and investments. Count 11: for year ending 31st December, 1989: omitting to declare income of £7,831, arising from bank interest, royalties and investments. Count 13: for year ending 31st December, 1990: omitting to declare

income of £15,723, arising from bank interest, royalties, investments and salary. Count 15: for year ending 31st December, 1991: omitting to declare income of £19,689, arising from bank interest, royalties, investments and salary. Count 17: for year ending 31st December, 1992: omitting to declare income of £22,247, arising from bank interest, royalties, investments and salary. Count 19: for year ending 31st December, 1993: omitting to declare income of £11,950, arising from bank interest, royalties, investments and salary. Count 20A: for year ending 31st December, 1994: omitting to declare income of £9,000, arising from salary. Count 21: for year ending 31st December, 1994: omitting to declare income of £14,175, arising from bank interest, royalties, investments and salary. 10 counts of contravening Article 137(1)(a) of the Income Tax (Jersey) Law, 1961, by fraudulently delivering to the Comptroller of Income Tax a statement required by Article 16 of the said Law which was incorrect: Count 2: for year ending 31st December, 1985: omitting to declare income of £3,889, arising from rental. Count 4: for year ending 31st December, 1986: omitting to declare income of £4,172, arising from rental. Count 6: for year ending 31st December, 1987: omitting to declare income of £4,362, arising from rental. Count 8: for year ending 31st December, 1988: omitting to declare income of £4,372,

arising from rental. Count 10: for year ending 31st December, 1989: omitting to declare income of £4,840, arising from rental. Count 12: for year ending 31st December, 1990: omitting to declare income of £6,778, arising from rental. Count 14: for year ending 31st December, 1991: omitting to declare income of £4,143, arising from rental. Count 16: for year ending 31st December, 1992: omitting to declare income of £2,849, arising from rental. Count 18: for year ending 31st December, 1993: omitting to declare income of £3,227, arising from rental. Count 20: for year ending 31st December, 1994: omitting to declare income of £2,062, arising from rental. Age: 44. Details of Offence: Over a period of 11 years the defendant, who is a chartered accountant, failed to declare income of £162,742 from five different sources. Total tax lost £33,018.42. Undisclosed income was bank interest ((£39,104), rental income (£40,694), investment income (£16,063), royalties (£25,854) and salaries - himself and wife - (£41,027). It was apparent from interviews conducted under caution that the defendant was less than honest with investigating officers. He admitted gross negligence, carelessness and stupidity and by pleading guilty to the relevant counts, he also admitted fraud. Details of Mitigation: Defence counsel said that the prosecution resulted in exceptional damage to his career - he would be

struck off as a chartered accountant and possibly fined again by the Institute. It was urged that he had provided immediate and full co-operation. Defendant felt he had been “singled out” for prosecution despite the available procedure under Article 137(4) of the 1961 Law which allows the Comptroller to accept pecuniary settlements. Defendant had paid £34,000 in back tax by the time of trial. Previous Convictions: Defendant had four previous convictions, the relevant being in 1993 where he was fined the reduced sum of £7,500 overall in connection with two infractions of the Housing (Jersey) Law, 1949 in that he leased a property to seven non-qualified persons between 1983 and 1991 and entered into leases with five other tenants without consent. Conclusions: Count 1: £950 fine. Count 12: £2,220 fine. Count 2: £1,360 fine. Count 13: £2,600 fine. Count 3: £970 fine. Count 14: £1,450 fine. Count 4: £1,450 fine. Count 15: £3,150 fine. Count 5: £900 fine. Count 16: £1,100 fine Count 6: £1,450 fine. Count 17: £3,900 fine. Count 7: £700 fine. Count 18; £1,160 fine. Count 8: £1,500 fine. Count 19: £2,000 fine. Count 9: £820 fine. Count 20: £750 fine. Count 10: £1,650 fine. Count 20A: £1,360 fine. Count 11: £1,360 fine. Count 21: £2,200 fine.

TOTAL FINE: £35,000 or 2 weeks’ imprisonment in default of payment, consecutive on each count. £2,000 costs. Conclusions: Conclusions granted. The Crown moved for 75% of the statutory maximum. Mrs. S. Sharpe, Crown Advocate. Advocate D.F. Le Quesne for the accused.

JUDGMENT

THE DEPUTY BAILIFF: It does seem bizarre to us that this tax evasion on such a large scale was committed by someone who was a member of the Institute of Chartered Accountants and who was employed by a local trust company. By way of background, over eleven years the defendant failed to declare some £162,000 of income and that, when you look at it, works out at something like £15,000 a year and that is more than some hardworking members of this community actually earn in a year. The tax lost amounted to £33,018.42. There is little mystery in what was not declared and if we may say so, we feel that a trainee accountant let alone a qualified man would have realised that royalties, rental income, bank interest, investment income and salary are declarable items. What we have found disturbing are the explanations which he gave for some of these omissions. Some of them in our view display an alarming amount of negligence. Certainly, Webster has a record and we have to acknowledge that it is a record of dishonesty in relation to a housing infraction for which he was fined a reduced sum of £7,500. What can be said in mitigation? Mr. Le Quesne, we feel, has said everything that could possibly be said. When the Comptroller had made it clear that he was not satisfied with the explanations that he was given, Webster appointed a firm of local accountants to prepare a report and he did that

immediately and for that report he had to pay a considerable sum of money. Also he made two substantial payments on account in an attempt to avoid prosecution. There is nothing sinister in that because, for the avoidance of doubt, there is a leaflet of the Comptroller dated January, 1994, which invites people to make payment in just the way that it was made. The final tendered sum of £61,000 was held on a suspense account for many months before being returned to Webster after the Comptroller had decided, in his discretion, that he would prosecute. He was perfectly entitled to do that. Mr. Le Quesne has most eloquently told us of the catastrophic consequences that Webster faces, despite the letter from his present employers. His Institute has been informed and will no doubt take action. His future is in jeopardy but he co-operated fully once the situation in which he had placed himself became untenable. We have had very careful regard to the three cases cited to us, namely AG -v- Fann (31st May, 1996) Jersey Unreported, AG -v- Faudemer (12th March, 1993) Jersey Unreported and AG -v- Raimundo (12th June, 1992) Jersey Unreported. We appreciate everything that Mr. Le Quesne has said to the effect that while the 22 counts contain elements of negligence and fraud, 12 allege negligence and 10 allege fraud, but the negligence counts amount to £122,048 of undeclared income and the fraud

counts to far less, that is £40,694 of undeclared income. The merit in that argument, however, in our view fails when we consider - as we have done most carefully when we retired - how these counts have been considered individually. We have to say that there is consistency and we are not prepared to alter that consistency. Therefore, despite everything you have said, Mr. Le Quesne, we going to follow the conclusions of the Crown and, Webster, you will be fined a total of £35,000 with two weeks’ imprisonment in default of payment on each consecutive charge of the 22 counts and you will pay costs in the sum of £2,000. Authorities AG -v- Fann (31st May, 1996) Jersey Unreported. AG -v- Faudemer (12th March, 1993) Jersey Unreported. AG -v- Raimundo (12th June, 1992) Jersey Unreported.