Pharmacist jailed over £200,000 VAT fraud

Conrad Chau duped pharmaceutical firms into sending him more drugs by using the fictitious scripts which had been subject to control measures so he could sell them on.

After he was sentenced Cheryl Burr of the HMRC said: “Financial greed led him to commit VAT fraud. Our message is clear. It is simply not acceptable to steal from the tax system and, ultimately, from honest UK taxpayers and businesses.”

Last month, Chau, 50, pleaded guilty at Aberdeen Sheriff Court to the £214,790 VAT fraud carried out at the Holburn Pharmacy in the city which he ran at the time of the offences between 2012 and 2014 but no longer has an affiliation with.

The court had heard how he had altered addresses on invoices and failed to pass invoices to his accountant.

He also admitted 12 fraud charges and two attempted fraud charges.

The fraud was discovered when a log of genuine prescriptions issued by local GPs and received by the NHS was compared to the forged versions of the same documents sent to the pharmaceutical companies by Chau.

Chau, whose address was given in court as Wellside Avenue, Kingswells, Aberdeen, wrote fake prescriptions, receiving £5,606.22 worth of discounted prescription products from two different pharmaceutical firms.

It was when this was discovered that the VAT fraud came to light.

Fiscal depute Kelly Mitchell said in court: “The accused pretended to these companies that he had dispensed his monthly quota to genuine patients and thereafter sent over quota orders, these were sent by fax and e-mail and contained fraudulently altered prescriptions for products that had never been prescribed by relevant doctors.”

Miss Mitchell told the court that while the search was being carried out boxes had been delivered which had invoices in them from the pharmacy to a healthcare practice in Saudi Arabia.

She said: “The invoices suggested that drugs were being exported to Saudi Arabia, as such the sale was deemed to be zero rated for VAT.

NHS Scotland’s Counter Fraud Services (CFS) said it appeared the fraudster had altered invoices from Scottish wholesale companies, to whom he had sold items, to make them appear as though they were based in the Middle East and Asia.

Inquiries carried out by the NHS fraud service established that the health care practice that the invoices were sent from was actually operating in Glasgow.

Her Majesty’s Revenue and Customs was contacted and their investigation resulted in Chau being charged with VAT fraud offences in excess of £200,000.

“An individual from the healthcare centre in Glasgow provided 24 invoices from June 2012 to July 2014 all showing details of VAT charged to the then Holburn Pharmacy, he confirmed that the VAT had been paid to the accused by way of BACS transfer. The total of the payment was £214,790.77.”

Chau’s solicitor, George Mathers, said his client had now sold the pharmacy and was working as a locum elsewhere.

Gordon Young, head of CFS, said “Conrad Chau’s actions could have delayed the provision of medicines to patients in need, due to the control measures in place.

“Engaging in criminality to wholesale medicines erodes the trust between community pharmacists, GPs, pharmaceutical companies, patients and NHS Scotland.

“Counter Fraud Services will continue to work in partnership with all health boards and law enforcement partners in Scotland to prevent, deter and detect fraud and will pursue fraudsters whenever they are identified.”