Top tax inspector found guilty of taking bribes

Michael Allcock, the maverick Inland Revenue investigator, was yesterday found guilty by an Old Bailey court of taking bribes "on a breathtaking scale".

Allcock rose to become one of Britain's top tax inspectors but over a five-year period he banked more than pounds 150,000 in cash as bribes, mostly from Middle Eastern businessmen.

In a trial that lasted four months the Old Bailey jury was told that the former section leader from the elite SO2 tax investigation office in London - which recovered an estimated pounds 100m in unpaid taxes between 1989 and 1992 - became a law unto himself.

John Black, for the prosecution, said: "This public official took bribes on a scale which was quite breathtaking, from extremely wealthy Middle Eastern businessmen based in London. They bought him off and in exchange he enabled them to avoid investigation into their tax affairs."

After Allcock's arrest in 1992, police raided his home in Colchester, Essex, and searched for details of his financial transactions over the preceding five years. They discovered that he had 11 bank accounts and six credit cards. They found that over this period he paid off pounds 57,807 in credit card debt and that a further pounds 91,390 was paid into his bank accounts.

Frequently, the court was told, the cash was paid in the form of pounds 50 notes. Jurors were told that this money allowed him to live a lifestyle well above that provided by his Civil Service salary of pounds 45,000. The court heard of his taste for fine wines and Jaguar cars and of how he told colleagues that legacies from his wife's relatives had funded his free-spending habits.

Allcock, 47, denied 11 charges of corruption but after deliberating for seven days the jury found him guilty of seven. In addition to accepting the cash bribes, Allcock was also found guilty of corruptly accepting the services of a prostitute, Michelle Corrigan.

In his defence, Allcock had told the court that the escort girl had become a shoulder to cry on when his wife became ill with breast cancer.

His counsel, Anthony Arlidge QC, described the relationship between Allcock and Miss Corrigan as similar to the one in the Pretty Woman film.

Allcock claimed that the affair developed from one of client and prostitute to one where he was able to refer to the ex-model as his "soulmate".

Hishan Alwan, 56, an Iraqi-born oil trade consultant from Knightsbridge in central London, was found guilty with Allcock on a charge of providing the services of a prostitute.

Allcock was also found guilty of accepting a pounds 22,000 all- expenses-paid holiday from an American businessman, Ara Oztemel, who was investigated by Allcock's team and found to be liable for pounds 2m back- tax.

Mr Black told the court: "His arrogance was such that in 1992 he went on a holiday with his family, the accommodation and general expenses paid in the way of bribes."

The holiday involved a cruise to Bermuda, accommodation at the Plaza Hotel, New York, and flights on Concorde.

Following the scandal of the Allcock case, the Inland Revenue has revised the way it operates and the old special office functions have been absorbed by a new Inland Revenue Special Compliance Office, which employs 420 staff in offices in London and the regions and tax settlements involving millionaire businessmen are now subject to closer scrutiny.

Yesterday a spokesman for the Inland Revenue said: "We are investigating disciplinary proceedings against several inspectors. We had to wait for the outcome of this case before taking matters further."

Allcock and Alwan will return to court today for sentencing.

Rich men's bungs, page 3