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Accountant must pay back £300,000 after High Court order

PUBLISHED: 13:51 02 June 2017 | UPDATED: 14:48 02 June 2017

Ipswich Crown Court. Archant Library.

Ipswich Crown Court. Archant Library.

Archant

Two brothers have expressed their disappointment after the actions of their family accountant from Weybread cost them hundreds of thousands of pounds.

Adrian Lummis, a trusted and long-standing accountant to Douglas and James Edwards, was alleged to have taken more than £186,000 from their company Nationwide Metal Recycling for his own benefit, but later repaid the money.

His failure to prepare and submit proper tax returns for the firm, based in Ardleigh in Essex, over a five-year period was also uncovered by auditors.

Following civil proceedings, Lummis, of The Street, was ordered to pay £304,000 to cover the cost of liabilities to HMRC and professional fees incurred by the Edwards family.

The 54-year-old, a family friend of the Edwards for 30 years, managed tax affairs for the brothers, their wives and their businesses Nationwide Metal Recycling, Southquay Enterprises and Roundwood Restorations.

The Edwards said they were disappointed that a man they considered “not only a long-standing colleague but have also a friend of the family” could commit “such an abuse of trust”.

The Edwards’ solicitor Mike Barlow, partner and head of litigation and dispute resolution at Leathes Prior in Norwich, said the family had “relied” on Lummis and trusted him “implicitly”.

“These were honest businessmen who go about their affairs properly and to find there were considerable liabilities to HMRC was worrying for them. They did feel let down.”

The investigation

In 2014 auditors from M&A Partners found Lummis had failed to file the brothers’ tax returns properly, or in some cases at all, over the five-year period from 2007 to 2012.

The £186,607.30 of misappropriated funds from the company was also discovered – two payments of £20,000 and £41,607 in the year ending March 31 2012 and a further £125,000 the following year.

Documents relating to the civil case claimed Lummis “disguised the illicit withdrawal as a corporation tax payment”.

Criminal charges were brought against Lummis, and subsequent civil proceedings also began to recoup more than £300,000 for fines paid to HMRC, fees paid to the auditors and “loss of business opportunities” at two other family firms.

Mr Barlow said Lummis had been “given every opportunity to participate”.

Resolution

At the criminal court, Lummis was cleared of three charges of fraud by abuse of position after a trial at Ipswich Crown Court on May 8.

The allegedly misappropriated funds were repaid by Lummis in 2014.

In the concurrent civil proceedings, the High Court ordered Lummis to pay a total of £304,055, including £142,230.76 to Douglas and James Edwards and £68,101.64 to Nationwide Metal Recycling.

The payments were ordered to be made by May 31, but Mr Barlow said on June 1 that no payments had been received and he would be advising his clients on steps to enforce the judgement.

This paper has been unable to reach Mr Lummis for comment.

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