Tory peer Michelle Mone’s businessman husband could be facing a lengthy jail sentence if found guilty of fraud charges in Spain. Billionaire Doug Barrowman has been charged with crimes including corporate tax evasion.
Spanish prosecutors said they were seeking custodial sentences for seven British businessmen, including the 57-year-old, ahead of their trial. Barrowman could be imprisoned for five-and-a-half years if convicted. All seven businessmen deny the charges, according to the Mirror.
The five-day public hearing was suspended at the 11th hour, having been due to start late last month. It has now been rescheduled for next May. The indictment relates to claims Barrowman and his co-accused benefitted from a “fraudulent” invoice.
Prosecutors allege it was created to evade tax and take millions of pounds out of a Spanish company to put in their pockets. The company went bankrupt four years later, costing 200 workers at a cable factory near Santander their jobs.
An earlier civil court case absolved Mr Barrowman and his partners of administrative wrongdoing. But following a parallel criminal investigation, a judge ruled there was sufficient evidence for a trial and charges were laid. The invoice was fully declared, following legal advice, Mr Barrowman's lawyers insist, and he and his associates would be “very vigorously contesting” the allegations.
Mr Barrowman and his wife, who are both Scottish and married in 2020, face scrutiny over a £200million PPE deal, which they are alleged to have profited from after Baroness Mone lobbied ministers. Mone, 51, who made her fortune from lingerie firm, Ultimo, has said she is temporarily standing aside from the House of Lords “in order to clear her name of the allegations that have been unjustly levelled”.
The couple deny wrongdoing. The National Crime Agency raided their homes and offices in London and the Isle of Man in April as part of an investigation into the deal. The Spanish case centres on a payment of €6.3m (£5.5m) by now-defunct Spanish company B3 Cable Solutions Spain to UK firm Axis Ventura in 2008. Axis had raised funds to buy B3, a cable plant based near Santander, which went bust in 2012.
The seven businessmen have been accused of benefitting from an invoice for “fictitious services” supporting the six-figure payment in July 2008. Mr Barrowman was an Axis founder member, but ceased to be a part of Axis four months before the payment. But a court document, seen by the Mirror, states that he admitted he was “one of the negotiators” of the deal and that he received some benefits of the commissions paid to Axis. His lawyers say the reason he is involved is because of his shareholding in B3 Cable Solutions.
Prosecutors say the invoice was created “to hide a partner payment” and “defraud the Spanish Treasury” out of more than half a million euros (£436,000) when it was partly used to offset corporation tax.
The tax deduction was just over €1.6m (£1.4m) and the rest of the €6.3m (£5.5m) declared as donations, according to court documents. The businessmen have insisted the payment was lawful and for genuine services, but their attempts to stave off prosecution was rejected by an appeals court, paving the way for the indictments drafted by prosecutors.
The full indictments, presented at the start of May last year, have not yet been made public. But prosecutors confirmed they were seeking jail terms for the seven British nationals at the centre of the civil case.
Maria Pilar Jimenez Bados, head of the regional Cantabria Prosecution Service, said: “In the B3 Cable case seven people have been accused of a crime of misappropriation and a crime against the Treasury. For the first crime prosecutors are seeking a prison sentence of three years in prison and a nine-month fine to be paid at a rate of €100 (£86) a day.
"For the tax crime the prison sentences prosecutors are seeking vary from three years to two years and six months. The indictment also calls for them to reimburse B3 Cable to the tune of €6.3m (£5.5m) and the Spanish Treasury €508,590 (£443,902).”
Mr Barrowman’s lawyers said in a statement to the Mirror: “The services in question were not ‘fictitious’, they were performed by numerous employees and consultants over a nine-month period in relation to acquiring Spain’s then largest copper cable manufacturing plant.
“The resulting invoice was specifically disclosed in the financial statements audited by Ernst & Young and the amount deducted for the corporation tax, not personal tax, was as advised by Garrigues, a top law firm in Spain. It is also important to note that there have been two prior civil judgments related to the disputed invoice and the insolvency of B3 Cable Solutions Spain.
“Both found in favour of the defendants, which include Mr Barrowman, who has been brought into these proceedings, not as a director of any relevant entity, but instead by virtue of a minority shareholding in B3 Cable Solutions Spain. This action will be very vigorously contested in the Spanish Courts by Mr Barrowman and others.”
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