A British financier faces a stiff jail sentence after being found guilty of a complex £76m fraud, which was uncovered after an eight-year investigation by HM Revenue & Customs.

Ian Leaf, 51, who lives in Switzerland, bought 13 subsidiary companies from plcs that had significant tax liabilities. He then took out fictitious loans with high interest from a bank registered in the Pacific island of Nauru, controlled by him, and used them to offset the tax owed to HMRC.

These loans were also used to undertake highly profitable foreign exchange deals, not subject to UK tax, out of which were paid dividends. Leaf then used these to reclaim corporation tax rightly paid by the companies before he purchased them.

London's Southwark Crown Court heard that the scheme netted at least £54m and a further £22m that HMRC had not yet refunded to Leaf's companies, but officials have admitted the figure could be higher.

Roger Neville the HMRC's senior principal inspector, said in a statement: 'This has been a long, complicated investigation into a sophisticated criminal scheme. It has been proved that Ian Leaf knowingly and deliberately set out to commit a multimillion-pound fraud.

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