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Brothel boss had £270,000 buried in his garage
A BROTHEL boss from Sheffield who failed to pay the taxman for more than 10 years has been jailed for 12 months and ordered to pay back nearly £350,000.
John Barrett, aged 61, of Standon Road, Wincobank, and his co-accused Edward Kirby-Dorsey, 74, made hundreds of thousands of pounds from their cash-only 'saunas' in Attercliffe and Leeds.
But they cooked the books and set up off-shore companies to avoid paying tax.
When Barrett's home was searched officers found 270,760 in two safes buried beneath his garage floor.
A further 105,060 was found in a safe deposit box registered to Barrett at the NatWest bank on Abbeydale Road.
The fraud came to light after police raided the Omega sauna on Attercliffe Road, and a similar establishment called Winston's in Leeds, in 2004.
The Operation Rampart raid saw 13 people arrested on suspicion of conspiracy to live off immoral earnings.
But police were left red-faced after Judge Simon Lawler QC last year ruled the brothel's owners could not be prosecuted because officers knew sex was for sale and chose to do nothing about it.
Franz Muller QC, prosecuting at Sheffield Crown Court, said Barrett and Kirby-Dorsey set up companies called Gladstone Investments, International Leisure Services and Grenville Services to launder the brothel profits.
The signatories for the company bank accounts were Barrett, Kirby-Dorsey, their wives Kathleen Barrett and Susan Kirby-Dorsey, and Barrett's son Anthony.
Further investigations revealed two Portuguese men named as company directors were fictitious.
Mr Muller said: "It was a cash business. The customers paid in cash and only cash was acceptable. There was no facility for any other form of payment.
"Tax returns were completed for the Inland Revenue. But the income received in cash from the customers exceeded the amounts declared. In short, the accounts were a complete sham.
"The court heard a cash machine was installed at the Leeds massage parlour and records showed withdrawals totalled more than 1 million."
Barrett, who has previous convictions for dishonesty dating back to 1969, admitted failing to pay tax between 1998 and 2005.
He accepted his total income was 787,029 on which he owed 258,076 tax.
He was also ordered to pay a 25,807 surcharge for non-payment of tax, 45,562 to account for the change in the value of money, 1,500 in prosecution costs and defence costs of up to 10,000.
Jailing him and banning him from holding a company directorship for 10 years, Judge Lawler said: "The matter is so serious only custody is appropriate. It is not the length of the sentence but the fact of custody which is important.
"Ordinary tax-paying members of the public would be outraged if they saw a man who has avoided paying tax for so long given anything other than a custodial sentence. You knew perfectly well you were making large amounts of money from those solely cash businesses. You knew perfectly well you had substantial tax liabilities.
"Examination of your bank accounts shows numerous cash deposits all calculated to channel funds from those two businesses and avoid your tax liabilities. There was personal gain here on a fairly large scale."
Kirby-Dorsey, of Ansell Road, Greystones, has also pleaded guilty to tax evasion and will be dealt with at a later date for health reasons.
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Wednesday 08 February 2012
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