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12:41 pm, November 10, 2009
Stephen Vaughan disqualified after admitting VAT fraud involvement

Stephen Vaughan, a former director of Widnes Rugby League Football Club Ltd, has been disqualified from acting as a company director for 11 years following his involvement in an alleged VAT fraud.

The Insolvency Service said today that Vaughan's disqualification followed enquiries into his conduct prior to the company going into administration in October 2007 with liabilities of more than £1.6m.

It said Vaughan had signed an undertaking giving details of alleged “carousel fraud” he carried out designed to prop up the finances of the rugby league club, which was technically insolvent at the time.

Vaughan, who has also owned soccer clubs Barrow AFC and Chester City, arranged for the Widnes Vikings club to “purchase” three consignments of clothing from a UK company, and on the same day “sold” the clothing to a company based in Spain, the Insolvency Service said in a statement.

The sale price of the clothes was just over £3m and the VAT amounted to £505,265.

The Insolvency Service added: “The transactions appeared to be part of a linked series of purchases between the UK and Europe. Mr Vaughan then attempted to reclaim VAT for the club, however HMRC refused the repayment of the club's VAT claim on these transactions.

“Payment for the goods was made via the First Curacao International Bank, based in the Netherlands Antilles. The bank was closed down by banking authorities when it was discovered that it provided banking facilities to a significant number of companies involved in carousel VAT fraud.”

The Insolvency Service said the way the clothing deals were carried out meant the club was involved in Missing Trader Intra Community (MITC) VAT fraud, also known as "carousel fraud".

Payment for the goods purchased was not made to the alleged supplier, but went into a third party's bank account in the Netherland Antilles.

The Insolvency Service said Vaughan failed to inform other directors of Widnes Rugby League Club about these transactions and failed to tell them about a loan of £392,000 made to the club in August 2006.

An Insolvency Service spokesperson told Crain's that by signing the undertaking, Vaughan had not admitted any criminal offence. He had, however, admitted that the club became involved in VAT fraud because of what he had done. The spokesperson added that no decision had yet been taken as to whether he would be prosecuted.

Ken Beasley, the Official Receiver of the Insolvency Service's Public Interest Unit in Manchester, said: “Carousel VAT fraud is a serious offence which deprives the UK of billions of pounds of tax revenue each year, and the Insolvency Service will investigate any director of a company involved in such actions."

Vaughan, a former boxing promoter from Liverpool, will be banned from acting as a company director, or in any way controlling a company, until November 24, 2020.

Between 1995 and 1998 Vaughan was owner and chairman of Barrow AFC, now in the Blue Square Conference. During his time there, HM Customs & Excise launched an investigation into allegations that convicted drug dealer Curtis Warren had financed the purchase.

Vaughan has always insisted he used his own money to buy Barrow and was never charged with any offence in connection with the matter.

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