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An ex-UK tax adviser at BGC Group who admitted taking part in a £24mn scheme to defraud the broker-dealer has been jailed after a judge found he tried to create a “secret financial reservoir” to avoid repaying his former employer.
Michael Viney was handed a 16-month prison sentence for contempt of court on Friday after the High Court in London said he had devised a scheme to hide and dissipate funds that he was supposed to use to reimburse the US company.
Wearing a blue suit, white shirt and light blue tie at a hearing in London, Viney nodded as the judge told him he was being jailed for 16 months for “particularly serious breaches”. Viney replied: “OK.”
Mr Justice Dexter Dias said: “I view his breaches not as ‘rank stupidity’ but grossly dishonest acts directed at providing himself with a secret financial reservoir that would evade recovery.”
BGC, which was led by billionaire Howard Lutnick before he became US commerce secretary this year, launched civil proceedings in 2020 after the broker-dealer said it had identified a “massive” £24mn fraud perpetrated by Viney and another UK employee, Xavier Alcan.
The company accused the two of funnelling cash due to or from the UK tax authorities into their own pockets between 2015 and 2020. BGC reached a settlement with Alcan last year.
Viney, an employee tax adviser at BGC who was described by the judge on Friday as having been a senior staff member in “a position of significant trust”, admitted in May 2021 that he had received “misappropriated payments”.
He acknowledged making false representations, including to HMRC, as well as doctoring emails and creating false documents as part of the fraud.
The defendant “exploited his trusted position within the BGC Group to procure and conceal 32 separate fraudulent payments”, the judge said on Friday.
Viney had been told to repay about £24mn in a court order in May 2022. However, he admitted last month that he had breached the order.
In an attempt to avoid repaying BGC, Viney received proceeds of about €200,000 from the sale of a property in Barcelona and dissipated them, including through payments to a now-defunct property company in Cyprus, according to the ruling on Friday.
He also dissipated about £21,000 of rental income from various properties, including 12 parking spaces in Leeds, three apartments in Salford, and a property in Tampa, Florida.
Further, Viney failed to disclose a financial investment worth about £1.3mn. While BGC ultimately recovered the sum, the court found Viney had sought to put the asset “beyond the reach” of the company.
“These were acts of significant deliberation and required planning and repeated acts of further deception in the attempt to cover them up,” the judge said.
In mitigation, Ian Whitehurst, a barrister representing Viney, told the judge last month that Viney had been under “considerable stress and strain” that had affected his judgment and led him to “actions of rank stupidity and also naivety”.
He said Viney had co-operated with “large aspects” of the court order and that about £11mn or £12mn would ultimately be realised from him.
However, the judge on Friday said that the defendant’s conduct “is far too serious to justify suspending the custodial term”.
Some of the methods used by Viney to avoid repayment replicated those used in the initial fraud, the judge noted.
Whitehurst and BGC declined to comment on the sentencing.