92-year-old billionaire behind Formula One just admitted to being a tax fraud to the tune of £652 million

If there was a Grand Prix for tax evasion, Bernard Ecclestone may have just won the championship title. Once nicknamed the F1 Supremo, Ecclestone made a name for himself as the CEO for Formula One. But the 92-year-old’s massive fortune will likely take a sharp left turn after pleading guilty to tax fraud charges on Thursday, one month before the trial was set to start.

The major point of contention is an overseas trust that amounted to more than £416 million (or $492 million), which Ecclestone admitted he failed to report to HM Revenue and Customs (HMRC).

He agreed to pay up to the tune of £652 million (around $793 million) for the decades-long tax fraud, accounting for interest and penalties. It’s a record-breaking settlement; two tax experts told the Financial Times it was the highest amount an individual paid HMRC for fraud, while tax consultant Ray McCann said the added £330 million slap on the wrist tax penalty was “without a doubt the biggest” in history. That’s in part because Ecclestone is being held accountable for 18 years of tax evasion between 1994 and 2022, according to prosecutor Richard Wright KC.

The origins of the suit date back to 2012, when HMRC first investigated Ecclestone. In 2015, Ecclestone was given the opportunity to clear any tax mistakes with a penalty under what’s known as a Contractual Disclosure Facility (CDF), or a COP9. He reportedly said he was not a linked beneficiary to trusts outside the U.K. when he was actually linked to several, one of which held a company that routed £416 million ($646 million) from a Switzerland account to one in Singapore.

While he knew about them, he “was not entirely clear how the ownership was structured,” Wright told the court, per the Financial Times. Wright did not respond to Fortune’s request for comment. 

Ecclestone’s civil settlement, otherwise clean record, and age helped him avoid jail time; his 17-month prison sentence was suspended for two years provided he doesn’t engage in any illegal activities during that time. His lawyer Clare Montgomery KC argued for Ecclestone to receive the lighter punishment due to his “frail” health and the already hefty fine he was paying (she declined to comment to Fortune). 

Before his fraud scandal and polarizing comments about Vladamir Putin being a “first-class person,” Ecclestone was synonymous with one thing: Formula One. He bought the rights to the racing series and ran it for more than four decades before eventually selling it to Liberty Media in 2017 for $8 billion. During his tenure, Formula One became rapidly popular, especially during the past couple of years. The franchise’s success bolstered Ecclestone as well; Forbes estimated his net worth at $2.9 billion. 

This might just be his last victory lap, though. Andrew Penhale, Chief Crown Prosecutor, released a statement that said, “All members of U.K. society, regardless of how wealthy or famous they are, must pay their taxes and be transparent and open with HMRC about their financial affairs.”

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Source link

About The Author

Scroll to Top