A FORMER taxman has been jailed for his role in a fraud which saw more than £100,000 in public money paid out in false VAT repayment claims.

Ex-VAT inspector James McGee, of Troon, South Ayrshire, was making bogus repayment claims while using the hijacked identity of a dead man to cover up his fraud, HM Revenue and Customs said.

On Monday the 66-year-old was jailed for 30 months at Ayr Sheriff Court on Monday, HMRC said, after being found guilty of two counts of money laundering and one count of fraud.

In total £101,443.14 was paid out due to the false VAT repayment claims, while a further £70,351 was withheld by HMRC.

READ MORE: Ex-Royal Marines sentenced after £300,000-worth of cannabis found

Laura Buchan, procurator fiscal for specialist casework, said McGee and his associates “used their knowledge of the system to steal significant sums and then tried to cover their tracks by laundering the money”.

Mark Dryden, 37 of Glasgow, Gary Prentice, 36, also of the city, and Carly McGinley, 33, of Clydebank, were sentenced earlier this year for their part in the fraud.

When McGee was arrested in 2013 he had two bank cards in the name of a dead man. One of the accounts had been opened after the man died, and the other had been credited with some of the fraudulently obtained money.

McGee, who left his compliance role with HMRC in 2009, had handwritten paper records at his house which contained detailed information on several VAT registered businesses.

Experts confirmed the handwritten records matched McGee’s entries in his old HMRC diaries and notebooks.

HMRC said that during interview McGee insisted he was not responsible for any criminality, but he did admit using the hijacked identity when calling its VAT helpline.

McGee, who used to work for the HMRC’s Ayr and Paisley offices, said the person whose identity he used was the real controlling mind behind the criminal scheme.

But in reality, HMRC said, McGee with the help of others, was central to the fraud.

McGee was sentenced to 24 months in jail for VAT fraud and handed a 30 month term for the two money laundering offences. The sentences are to run concurrently.

Dryden admitted to being concerned in an arrangement of criminal property in October last year, HMRC said, and he was sentenced to 10 months in jail in February.

Prentice, HMRC said, pleaded guilty to being involved in serious and organised crime and being concerned in an arrangement of criminal property.

READ MORE: Glasgow man jailed for at least 25 years for murder of Dutch writer

At Ayr Sheriff Court in February he was sentenced to 300 hours of unpaid work to be completed within 24 months. He was also made subject to a restriction of liberty order between 5pm and 5am for four months.

And McGinley, HMRC said, admitted to being involved in serious organised crime in November. She was fined £1,120 at the same court in February.

Lynsey Thompson, operational lead for HMRC’s fraud investigation service, said: “McGee used his knowledge of the VAT system to coordinate a scheme to steal from the public purse – money that is essential to fund the services we need, such as hospitals and schools.

“This was a shameful way for a former employee of 34 years to act, but this conviction shows that nobody is above the law.”