An independent financial adviser, a City trader and a former police officer have been jailed for a total of eight years for a £2.4m bogus film tax scam after a long investigation by HM Revenue and Customs officers.

Simon Osborne 58, an IFA from Llantwit Manor, Wales, was jailed for two years and eight months yesterday after being found guilty of Conspiracy to Cheat the Public Revenue. He was jailed for his part in introducing Simon Hill, 50, a former Wales international rugby union player, to the scheme.

Roderick Bond, 59, a former police officer, and Lee Palmer, 45, a financial trader, invested in the Formula 1 Projects LLP scheme that involved claiming false tax rebates for a film featuring F1 racing stars which was never made.

Terence Potter, 58, a former accountant, created the illegal scheme for wealthy investors with the four defendants, said HMRC.

Mr Bond, of Washway Road, Sale, Greater Manchester, an insurance consultant and former police officer, was found guilty of Conspiracy to Cheat the Public Revenue on 22 May and was sentenced to two years and eight months in prison.

Mr Palmer, formerly of Ida Street, Poplar, East London, but now of Kremlin Drive, Liverpool, a financial market trader, was found guilty of Conspiracy to Cheat the Public Revenue,  and sentenced to two years and eight months in prison.

Mr Hill, of Wick, Cowbridge, South Glamorgan, a dentist who was previously a Cardiff and Bridgend rugby union player and Welsh international, admitted Conspiracy to Cheat the Public Revenue, on 19 April and was given a 20 month jail sentence suspended for two years. He will also have to do 300 hours unpaid work.

The scheme saw investors claim significant financial losses on the £6m they claimed to have spent between March 2008 and May 2009. These artificial losses enabled investors to falsely claim around £40,000 in tax relief for every £20,000 they had invested.

HMRC investigators identified a series of suspicious tax repayment claims, which had originated from partnerships set up and managed by Monaco-based accountant Mr Potter. The majority of the tax refunds claimed by investors were withheld and £210,000 that had been paid out has since been recouped by HMRC.

Simon York, director, Fraud Investigation, HMRC, said: “These men tried to cheat the system by claiming tax relief on a non-existent film and were thwarted by HMRC investigators who work tirelessly to stamp out fraudulent activity.

“For anyone thinking of embarking on a similar path and stealing money from honest taxpayers, this result shows that nobody is beyond our reach.”

The members had to show they were working at least 10 hours a week in the business. The claims were supported by individual diaries running to hundreds of pages produced by Mr Potter and sent in to HMRC by Mssrs Bond, Hill and Palmer to substantiate their tax rebate claims.

More than 60 officers from HMRC’s Fraud Investigation Service took part in the operation that led to the arrests in August 2014. Nine properties were searched and computers, business records and mobile phones were seized.

Defendants in two other trials linked to this latest case have all been jailed for their part in the scam. Mr Potter, already serving eight years for being a central figure in them all, pleaded guilty in September 2017 to his role in the Formula 1 Projects LLP conspiracy.