MonthJune 2009

Tim Carron Brown sentenced to two-and-a-half years’ jail for 312,000pd VAT fraud (updated) re Omedian, Companytv, Second Sight Ltd, Anstruther Management

Tim Carron Brown – who pretty much deserves his own category here, doesn’t he? – was sentenced at Bournemouth Crown Court on the afternoon of Friday 26 June 2009.
(Image: HMRC)

He was sentenced to two and a half years, serving half of this time in prison, and disqualified from being a company director for eight years.

He was sentenced on the charge of cheating the Public Revenue, namely HM Customs and Excise, later HM Revenue & Customs, by dishonestly accounting for Value Added Tax (VAT) and/or monies charged as VAT in relation to four limited companies. An offence of cheating, contrary to common law.

The four companies, through which the fraud was committed by Carron Brown as a Director, are: Companytv Limited; Second Sight Limited; Anstruther Management Limited; Omedian Limited.

All of these VAT registered companies were run from a rented property in Waddock, Dorchester, and previously from rented property in Ickham, Kent. He was arrested in August 2006.

(Separately I’ve been told that there’s an application for bankruptcy proceedings against him, but haven’t confirmed that.) He was also subject to Bankruptcy Proceedings instigated by Lombard North Central (apparently a financial/leasing/loans organisation). He was made bankrupt at Weymouth County Court on 1 June 2009.

Relating to that, I’ve received a press release from HM REvenue and Customs:

Dorset VAT fraudster jailed

A Dorset based fraudster who illegally reclaimed £312,000 in VAT (Value Added Tax) was jailed for two and a half years at Bournemouth Crown Court today.

Following detailed investigations by HM Revenue & Customs (HMRC) officers, Timothy Colin Carron Brown (aged 52) pleaded guilty on 22 May 2009 to an offence of cheating the public revenue.

Peter Avery, HMRC Assistant Director Criminal Investigation said: “This sort of scam requires detailed planning on the part of the criminal and immense dedication from HMRC officers to unravel. This calculated attack on the VAT system not only robbed the exchequer, and therefore honest UK taxpayers, of public funds, but is also unfair to those respectable businesses that diligently abide by the rules.

“Tackling VAT fraud is a priority for us and we will not hesitate to pursue those who commit this type of offence. Anyone who has information about suspected tax fraud can call our 24-hour Customs’ hotline on 0800 59 5000 or email customs.hotline@hmrc.gsi.gov.uk”

Upon sentencing His Honour Judge John Harrow said: “I take the view that you invested a substantial amount of time and energy into the business ventures, and the companies were set up for a legitimate purpose. However you exploited the VAT system by fraudulently claiming VAT repayments of £312,000. This was taxpayers’ money and despite what was said (by defence counsel) it (the fraud) did have a degree of sophistication.”

Judge Harrow then commended the main investigating officer: “For the degree of hard work and investigation skills in this case.”

The VAT fraud involved Carron Brown submitting VAT repayment claims in relation to four VAT registered limited companies. The claims were not legitimate and he was not entitled to the repayments.

Carron Brown used a number of methods to perpetrate the fraud. These included reusing invoices for which he had already reclaimed VAT; submitting false invoices and records, and trading between his own companies to reclaim tax on purchases but not accounting for the corresponding sale.

The fraud was committed between 2001 and 2005. ‘Nil’ returns were rendered once officers began to probe into the companies. Carron Brown used the proceeds of this crime to fund a seemingly affluent lifestyle. HMRC and its prosecutors will pursue confiscation proceedings. The case was successfully prepared for prosecution by the Revenue and Customs Prosecutions Office (RCPO).

Here’s the explanation of the offence from HMRC: “VAT registered businesses must charge VAT on the selling price of any goods and services that are liable to VAT. This is known as ‘output tax’ and must be paid to HMRC.

“VAT registered businesses can reclaim VAT paid on their business purchases. This is known as ‘input tax’.

“In simple terms the amount of VAT that can be reclaimed as a ‘VAT repayment’ is the difference between the VATable sales (output) and VATable purchases (input).”

Update: the Dorset Echo has a piece about it:

It was proved that Brown submitted illegitimate VAT repayment claims for four VAT-registered limited companies for which he was not entitled to repayments.

Investigators found Brown used a number of methods to perpetrate the fraud, including reusing invoices for which he had already reclaimed VAT.

His other scams included submitting false invoices and records and trading between his own companies to reclaim tax on purchases without accounting for the corresponding sale.

David v Goliath in the newsroom, and why we need new wrappers for journalism

Wow, there’s been a lot of heat – and pretty much zero light – generated in the last few days, mainly because of a couple of stories from the New York Times, and then because of the endless argument (which shouldn’t be an argument) about “the future of journalism”. Oh, man, this stuff gets boring fast.

And more to the point, if everyone is worrying about what’s going to happen to newspapers, why is it that it’s the journalists who are doing all the debating and experimenting (I’m counting blogs and other web-only publications, such as TechCrunch and Engadget and the whole Nick Denton stable among the “journalists” thing, because like it or not they’re helping shape the landscape)?

Why is it us, the people who used to just have to worry about the grey stuff that went between the adverts, and not the publishers, who were the ones who put all the paying stuff around it? Because don’t fool yourself: the grey stuff, while it might excite your grey stuff, is expensive to make and isn’t a profit centre. It’s all the things around it that helped generate profit: the physical print, the adverts of various sorts, all sorts of other peripheral things (“special offers”, conferences organised by the newspaper, and so on).

A couple of tweets crystallised this for me. Paul Bradshaw pointed to Robert Picard who pointed out that journalism is not a business model, just a process.

Ian Betteridge then followed up: publishing is the business.

There you have the whole conundrum in a nutshell. Put it another way. Putting books into parcels is a process. Getting orders from people and then shipping those parcels to them at profit – that’s a business. Amazon is the business. Packing books is the process. It might be uncomfortable, fellow journalists, to think of what you do as book-packing, but look at it another way: people order those books because they want them, and are glad to get them.

To repeat: journalism is the process and publishing is the wrapper that you put around journalism in order to make it profitable and sustainable. Journalism will continue, just as putting books into parcels will continue, even if Amazon disappears; you’ll just do it yourself, buying it at a local store and sending it to Granny. Might be more expensive than Amazon, but that’s just how it is.

With that in mind, one has to consider what’s happening to news organisations (“newspapers” is starting to sound a bit 20th-century to my ears). The internet has come along and caught publishers completely off-balance. And there’s a new breed of publishers, who have started on the internet, and are internet natives, and they simply don’t play by the same rules either of print publishing or of print journalism. The former upsets print publishers, and the latter upsets print-origin journalists (in which I’ll include myself, at least until I had an epiphany I’ll explain below).

First, the NYT pieces that caused the row. The first, When the thrill of blogging is gone (sorry, I’m not going to do the daft headline capitalisation), takes as its jumping-off point that fact determined by Technorati that 95% of blogs are abandoned within a pretty short time, and then does the hard work of finding people who used to blog, and now don’t. Fair enough. Seems pretty straightforward to me: find a cultural trend, see if it’s backed up, write about it. Reflect the readership (because there must be plenty of NYTimes readers who’ve started a blog) back to themselves.

This kicked off something of a firestorm on Twitter, or at least those I follow on Twitter, where the NYT was accused of “dumping” on blogs. Er, no, people. It was corralling facts and relaying them. It wasn’t saying “all blogs are dead”. It was saying “lots of blogs die – howcome?”

The second piece, which had more far-reaching effects, looked at the cultural thinking behind a couple of really big news blogs, including TechCrunch. Ping! Get the Tech scuttlebutt – it might even be true! was, again, looking at something that really happens: tech blogs scrapping amongst themselves for page views, and putting up stuff that they suspected themselves wasn’t true, but what the hell, it might be, so let’s get it out there. Hence TechCrunch writing that Apple was looking to buy Twitter – even though Michael Arrington is quoted in the piece saying that he didn’t think it was true when he posted it. A telling quote from him is:

“Getting it right is expensive,” he says. “Getting it first is cheap.”

Oh, my. Twitter firestorm supreme. I found myself pitching into a three-, four-, five, six-way involving Jeff Jarvis, Matthew Ingram, Tim O’Brien (NYT Sunday business editor), Dave Winer… did I miss anyone out? The “print” journalists’ thinking: publishing stuff you know isn’t true just ain’t the way to do it. The response (from Jarvis, certainly): that’s how it is in some places. Jarvis makes this point more eloquently in a post on his own blog. It’s quite an interesting test of your own position whether you think journalism needs to be about “standards” or “process”. I found it offends me in some visceral fashion to think of publishing stuff that I really believe isn’t correct. That’s just not how I think of it being done.

But as I prepared to launch another tweet in the effort to breach the Jarvis defences, I found myself reflecting on something Clive James used to say in his TV reviews. “If I find I share an opinion with [some repugnant person], I reexamine it at once,” he said. Mine is the obverse: if I find I’m disagreeing with Jarvis, it might be time to step back and start questioning my own thinking, because there’s a high likelihood it’s faulty. Which led to my epiphany.

Here’s how it looks to me, viewed through yet another prism. Malcolm Gladwell wrote a really interesting piece in the New Yorker about how Davids – the little armies or organisations – can compete and defeat the Goliaths. He points to the example of a girls’ basketball team which beat many far more experience and able teams by using a tactic (the “full court press”) that’s unusual for that level; Lawrence of Arabia, who defeated the Turkish Army by using desert (essentially, guerilla), not military, tactics; and he points out that actually, David can have a pretty good shot at things by not playing according to Goliath’s rules. Because Goliath got where he did using his tactics. Of course he’s the best at them.

OK: now see the publishers of Gizmodo, Engadget, Gawker, TechCrunch et al as the Davids, fighting the Goliaths of the New York Times and, of course, the Guardian and all the other papers. Should they fight on the same terms? If they want to get beaten, sure. They’ll never be able to find the experienced journalists, the experienced sales people, the special something that the papers have been able to build up over decades. The papers have the news process down pat. They can get those stories into paper-sized parcels and out to people so effectively there’s no room left.

So the blogs have to create their own battlefield, their own rules, and fight there. (I’ll use the metaphor of military action because plenty is at stake in this. Get it wrong, and you get stuff such as the NYT management imposing 23% pay cuts on Boston Globe staff – to which one can only say “yeow”. Because

The [New York Times] company posted a net loss of $57.8 million for 2008, and $74.5 million in the first quarter of this year. The Globe has been the biggest drain by far, with operating losses of $50 million last year and a projected $85 million this year, not counting the union concessions, according to management.

)

OK. So blogs have to create their own rules. Such as what? Such as doing stuff that the papers won’t. Post rumours, and declare them as such; copy and rewrite like mad, so that how fast you can get the post up is more important than whether you checked it; let the readers in effect write the news; publish galleries of Photoshopped “is this the next iPhone?” galleries.

All the while, the Goliaths of the news industry stand by, shaking their heads. Hell, they’re doing it wrong! That’s not how you put stuff into a news parcel! It’s like this… hey, doesn’t anyone want it? Funny, the orders have dried up. And the Davids count the money they’re getting from adverts supplied against millions of page views. (They don’t have as many journalists as in a traditional news room, you say? Yeah. Life’s like that sometimes.)

What the established news organisations in the US really need to have right now is some people on their commercial side who really live on the internet, in the way that so many technology journalists have been for years and years. I wonder to what extent they do; all the talk about paywalls has that slight tinge to me of people who don’t live there, and look at all those millions of page views and think “surely we can persuade a few of them to pay”. I think actually that to talk about paywalls on web-only generalist content is to look in the wrong place. There are plenty of ways to make money on the internet – publishers like Denton and Arrington show us that. (Well, we can infer that they do from the fact that they haven’t vanished. If someone wants to send me their financials, or point me to them, I’d be happy to publish them.)

There is one note of relief: unlike war, it’s not absolute. There’s plenty of room for everyone to thrive in this: the Davids and the Goliaths can live alongside each other. But the latter have to adapt so that they can get it right, and trade on the things that have got them where they are – which in effect means their brand reputation – and capitalise on it. Else those Boston Globe cuts aren’t going to be the last.

In the meantime, it seems that the journalists are having to do not only the packing of the news parcels, but also try to build the business around them. Thus you get efforts such as “how to save newspapers in 140 characters“. Many are praiseworthy, but aren’t the humble (or not) scribes plenty busy just trying to pack the parcels? Rather like the stockbroker’s friend who asked “Where are the customers’ yachts?”, I’m tempted to ask “where are the publishers blogging and tweeting about the next business models?”

Because remember: journalism is the process. (Talking about the “future of journalism” is a bit daft. The future of parcel-wrapping? Yeah, probably more automated.) Publishing is the wrapper that makes journalism profitable. Denton and Arrington have created wrappers that work for internet content. Has everyone else?

On the future of journalism, seen through the lens of the Technology supplement

It can be quite depressing to be part of a story that’s being about a subject you know about, where people who are ostensibly your peers – that is, equipped with the same skills as you, with access to the same tools as you – are reporting on it. Because it shows how rubbish people can be at simply reading a piece of text and regurgitating it.

If the future belongs to amateurs, one has to really worry. Though the professionals aren’t always doing such a bang-up job.

Case in point: PaidContent. PaidContent UK wrote a story which absolutely correctly said that Guardian management is considering whether to keep the printed Technology section going. Prices of raw paper have risen; job ads, which was always meant to be the raison d’etre of “G3″ specialist sections (Guardian 3: there’s G1 – the main paper – and G2, the “features” bit), have moved online, especially for technology jobs.

Nevertheless, the Technology supplement does get job ads, and it does occasionally get display ads. So the idea of closing it isn’t a fait accompli.

Robert Andrews got wind of the review that’s going on, which is part of a far larger look at costs, and wrote about it. (I could argue about the link text – “may” would have been good – but anyway.)

Robert did try to contact me before writing; I was offline (though I had my mobile…). He did speak to the Guardian’s press office. Apart from being finicky – Online started a long time ago and Vic Keegan wasn’t the launch editor – it’s a good piece of journalism: find something out, speak to those who are in a position to speak about it.

(I’d take issue actually with this:

The move is thought to be due to worsening tech ad spend but also the fact that many readers, naturally, are online natives with a voracious appetite for tech news throughout the week… one school of thought has it that a weekly dead-tree edition seems like anachronism.

Actually, it’s very evident that the people who read the print section aren’t exactly the same ones who read the Technology content online. They get something extra. And it’s important for other reasons: it’s easier for a civil servant to show a piece of paper to a minister; easier to wave in their face than a website.)

(Note also that Azeem Ashar adds some detail in the comments.)

Next up: Press Gazette. Following up the PaidContent story, they actually did contact me – we spoke by mobile. Look, there are my quotes in the story. Accurate. Journalistic. Good. Can’t argue with the headline or intro. Though I would say that there aren’t any staffing implications. We’re more than busy anyway, and we could be just as busy even without the print section – we’d be writing stuff for the main paper, the features section, and so on. (And again, interesting comments.)

And now we begin the slide downhill – and the depressing thing is that it’s the lousy reporting that actually gets bounced around the blogo/twittersphere.

First, MediaWeek, which has a story that was originally headlined “Guardian to close Technology supplement”. And then an intro: “The Guardian is considering dropping its Thursday Technology supplement, according to Paidcontent.”

Exactly how crap is that? Intro and headline completely disagree. And it’s a complete ripoff of PaidContent’s er, content. I emailed to complain, and the headline was changed. Otherwise it wouldn’t have been. (MW says it came from Brand Republic. Thanks a lot, BR.)

And finally we come to the World Editors’ Forum, which wrote:
Headline: The Guardian reconsiders Technology supplement
Intro: The Guardian is due to drop its Thursday Technology supplement, paidContent:UK reports.

I mean, come on. That’s just incompetent. I’m sorry, but it is. The headline is correct; the intro, wrong. That’s not what PaidContent said.

Some more:

It is also feasible that the printed edition just could not compete with its online counterpart, which is updated daily. Technology enthusiasts, moreover, are presumably more inclined to log on regularly than wait for the Thursday paper to land on the doorstep.

“Could not compete”? What rubbish is this? Have they bothered to find out who runs the online content (me) and who edits the physical section (me)? Apparently not. even though I’m all over the internet like a rash. Hell, my mobile phone number is on this site. I’m not a hermit.

Nick Passmore launched the Online supplement in May 1994. In 2005 it was rebranded Technology with the arrival of new editor Charles Arthur, and its science counterpart supplement Life was merged into the paper when the paper adopted a berliner format.

Nice – they’re read the comments on the PaidContent story. Except they didn’t research this blog. I didn’t arrive until November 2005, two months after the September relaunch in Berliner format.

So let’s see, that’s a slew of factual errors, a basic subbing error (headline doesn’t agree with intro), in a piece just four paragraphs long. (I haven’t bothered to fisk it all.)

The trouble is that this leads to people saying “Oh noes! The Guardian is dropping technology coverage!” NO IT BLOODY WELL ISN’T. Which I pointed out (and they then corrected.)

So the score: two lots of good reporting, where sources are checked (PaidContent, Press Gazette); two of crap reporting (MediaWeek/Brand Republic, WEF). Trouble is that the meme that gets passed around Twitter (for sure) is the idea that it’s going to close – no doubt, none of the subtlety in the original story.

Frankly, that’s a bit crap all round, and makes one consider the final score.
1) how well can proper journalism (PaidContent, UKPG) survive when you have copy/pasters all around? Copy/pasting is cheaper than finding stuff out. Quicker, apart from anything.
2) look how easily ideas get crunched into misconceptions in being translated into 140 characters, especially if they’re taken from headlines that are just plain wrong.
3) some people can’t read, parse and regurgitate a piece of text.
4) I wonder how many times have I written something that’s unwittingly incorrect because I haven’t been able to get at original sources? Not often, I hope. But this is the sort of experience that makes me even more determined not to accept lazy copy/paste stuff, and to check stuff with sources. Properly.

See you next Thursday in print.