HMRC has launched an internal investigation into the conduct of officers involved in a flawed prosecution bought against a high-profile London restaurateur.
The four-year investigation into Frank Dowling, who ran several venues in London’s O2 Arena, collapsed in 2017 and cost the tax payer over £250,000.
Dowling claims the debacle cost him his business empire and affected his mental health. He faced ten years in prison during the ordeal.
The internal inquiry, which was launched in May, will probe allegations of a criminal conspiracy against Mr Dowling.
His multi-million-pound business was put into liquidation soon after he was arrested in 2013 for alleged non-payment of tax.
All charges against Mr Dowling were eventually dropped last year and he was awarded £274,000 in costs after the prosecution admitted it had no evidence to offer in the case.
HMRC internal affairs officers are now understood to be scrutinising court documents and witness statements following complaints that tax office personnel involved in the case, codenamed Operation Byword, colluded with accountants and insolvency practitioners to ruin the American businessman.
At the time of his arrest, Mr Dowling was working with accountants to restructure his business in order to refinance and pay off debts. The three leases he owned in the O2 are believed to have been worth around £18m.
Following his arrest, administrators working with HMRC seized his company and placed it into liquidation.
In addition to the venues at the O2, which were Union Square, American Bar & Grill and Inc Club, MrDowling’s company, Greenwich Inc Trading Ltd, ran several other pubs, bars and restaurants including the Elbow Rooms pool bar chain, Trafalgar Tavern, Admiral Hardy and Bar du Musee.
The collapse of the business left Greenwich Council with a £350,000 hole in its coffers through lost business rates.
Mr Dowling says at times during the investigation he felt suicidal. He was charged with three counts of cheating the public purse, but investigators were unable to provide evidence to support any of the charges and a judge threw the case out on the grounds of abuse of process.
After spending a year reviewing HMRC documents made available through the court disclosure process, Mr Dowling and his advisors have lodged a complaint and HMRC’s Internal Governance department are investigating.
It is expected that the scope of the inquiry will extend to look at links between senior tax office investigators and several accountancy service businesses involved in the case.
Following the collapse of the prosecution, Mr Dowling described the case as “ill-founded, ill-conceived and just plain wrong”.
“The original accusations were made by individuals to forward their own commercial interests and accepted by authorities although they had proof to the contrary,” he said.
“I and my family have been through hell as they tried everything they could to ruin me.
“It has been devastating for my business interests as many third parties decided to treat me as guilty and sought illegal and immoral means to seek commercial advantage, but the truth is out there for everyone to see now. There’s a feeling of relief that it is over but also anger at what they have put me through and how much money has been wasted.”
He believes the documents disclosed to him show a web of collusion between parties and maintains that he was the target of a malicious campaign. He believes details of his arrest were leaked to the press by officials and that investigators were intent on prosecuting him before any evidence had been uncovered.
He alleges a string of offences have been committed including perjury, perverting the course justice and conspiracy to defraud. The investigation is expected to take several months.
An HMRC spokesperson said: “We do not comment on the affairs of individual customers.”
Source: The Telegraph