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Gloucestershire Business News

County businessman defrauds VAT man of £46,000

A young Forest of Dean businessman who falsely claimed VAT refunds of more than £46,000 was hauled before crown court today (April 13) for sentencing.

Dad of four David Cholefko of The Woodlands, Gloucester Road, Longhope, pretended his firm E4ECO Ltd had paid VAT of £46,559 on its expenditure and was entitled to reclaim it.

In fact, the company had made no sales and did not supply any services, said prosecutor Alec Small at Gloucester crown court.

Cholefko pleaded guilty to five charges of fraud by claiming he was due to VAT refunds between Sept 2014 and Sept 2016 and one of preparing a false product development agreement to use in the course of fraud.

He avoided jail after telling a court he can pay back in full. He was sentenced by recorder Ben Compton QC to 12 months jail suspended for a year and ordered to do 50 hours of unpaid work as well as pay costs of £250.

The judge had been told by Cholefko's barrister, Lyall Thompson, that he is in a position to repay the £30,000 he actually received from HMRC before they became suspicious and withheld the final £16,000 refund payment.

Recorder Compton ordered Cholefko to pay over the money by May 11.

"If this was a case where you had any previous convictions or even if there had been any prevarication about your guilt an immediate custody sentence would follow.

"This was money which belongs to the State - it belongs to the people of this country," the Recorder said.

"I imagine that this appearance today at Gloucester crown court is an enormous embarrassment to you."

Cholefko nodded his agreement.

The judge went on "I think normally you are a good and decent person. This was an act of enormous foolishness because you were never going to get away with it. I don't think you will ever re-offend again."

Mr Small had told the court Cholefko formed the company in early 2012. He made his refund claims to HMRC between Sept 2014 and Dec 2016.

An accountant alerted the authorities of her suspicions and when Cholefko was approached by HMRC he said the company was designing a device which would sit in buckets of cleaning fluid and regulate the ratio between water and fluid.

He said this design had been effectively stolen so his company was now working on a new product design.

He produced a product development agreement which had an invoice with it showing work done and to be paid for.

"He said it was on the basis of that document that the VAT returns were based. A fraud inquiry commenced and when he was interviewed in November last year he admitted his returns and the document had 'no basis in truth.'

"He said he did it because he was in financial difficulties and had been very close to a breakdown," Mr Small said.

"He said he knew what he was doing was wrong and he wished he could correct it."

Mr Thompson told the court Cholefko had genuine remorse. His offending had been out of character.

"His background is a lack of previous offences, an education, university degree, churchgoing lifestyle," he said.

"This was a case of over ambition. He got beyond himself. He got involved with someone unscrupulous who took a large amount of money from him.

"He has got four children aged two to seven. His wife and brother in law are here today. He presents no ongoing risk to society.

"He has got money in the bank and is going to pay it over as soon as that can be arranged."

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