A man and his wife from Blackpool, who hijacked their friends’ identities in order to fraudulently claim £1 million in VAT, have been jailed after an HM Revenue and Customs (HMRC) investigation.

Richard Williams, 55, and Laurel Howarth, 28, pretended to run a number of businesses, across the North West region, selling specially-adapted beds for the disabled. They used the identities of Welsh and Lancastrian friends and even changed their own names by deed poll to match the identities, faking invoices and customer records to make fraudulent VAT repayment claims.

During the fraud, they transformed a canal barge into a replica World War II German U-boat and ran it as a public attraction at Clarence Dock in Leeds. The couple also continued to claim benefits such as Disability Living Allowance throughout the duration of the scam.

Sandra Smith, Assistant Director, Criminal Investigation, HMRC, said:

“Williams and Howarth thought they had evaded HMRC’s investigators. They couldn’t have been more wrong. The pair went to great lengths to try and cover their tracks. Today’s sentences serve as a lesson to those who are tempted by the lure of fraud.”

HMRC officers became suspicious of the business records supplied by Williams and arrested him during a dawn raid on his fake submarine in January 2012. His wife was also interviewed under caution at Leeds Police Station later in February.

The pair were later charged with multiple counts of cheating the public revenue and fraud and pleaded guilty to separate charges in 2014.

At Manchester Crown Court today, Williams was sentenced to four and half years jail and Howarth to 20 months.