- Former takeaway owner Zhang Jin Chen has been ordered to pay more than £70,000 after withdrawing tens of thousands of pounds in cash and spending money on luxury items
- The 52-year-old sold his house in October 2020 and withdrew his share of the proceeds before applying for bankruptcy in July 2021 claiming he could not repay his debts, including a substantial VAT bill
- Chen was handed a suspended sentence in May last year after being found guilty of fraudulently disposing of property as a bankrupt and will face imprisonment if he fails to pay back the money he owes
A former takeaway owner who withdrew tens of thousands of pounds from his bank account and bought items from Apple and Burberry instead of settling the tax bill for his business has been ordered to pay more than £70,000.
Zhang Jin Chen was handed a confiscation order of £62,755 to be paid within three months along with costs of £8,000 when he appeared at Portsmouth Crown Court on Friday 13 February.
The 52-year-old could face 18 months in prison if he fails to pay back the money. Even if Chen does not comply and goes to jail, he will still have to make the payment.
Chen, of Havant Road, Portsmouth, previously ran the Fortune House takeaway as a sole trader business from an address on Albert Road in the city.
The confiscation order follows a suspended sentence he received in May last year after being found guilty of fraudulently disposing of property as a bankrupt under the Insolvency Act 1986.
Alexander Grierson, Head of Asset Recovery at the Insolvency Service, said
Zhang Jin Chen had more than enough money to settle his tax bill following the sale of his house but chose instead to withdraw large sums of money and make luxury purchases.
This confiscation order means that Chen’s debts will not disappear – he will remain liable for the full amount until it is paid.
The Insolvency Service will work tirelessly to protect creditors and ensure individuals like Chen face the full consequences of attempting to defraud the system.
Chen registered Fortune House as a business with HM Revenue and Customs (HMRC) in February 2012 but did not register it for VAT.
HMRC officials visited the takeaway in February 2020, finding evidence that Fortune House should have been VAT registered since December 2012, more than seven years before.
Chen applied for bankruptcy in July 2021, stating that he knew he owed VAT but that he could not repay his debts.
However, in October 2020, Chen and his ex-wife had sold their jointly owned house on Garnier Street in Portsmouth.
Over the next two months, Chen withdrew his proceeds of the sale in cash, the largest of which were two withdrawals of £30,000 in November 2020. Chen failed to provide any proof to the Insolvency Service that he had used these funds to clear gambling debts, as he had claimed.
He also spent more than £3,500 on Apple products in November and December 2020 and a further £880 on a purchase from Burberry nine days before Christmas. Again, Chen’s claim that he no longer owns any of these items was not supported with any credible evidence.
Chen signed a five-year Bankruptcy Restrictions Undertaking which comes to an end in March 2027. This restricts him from being able to borrow more than £500 without disclosing his bankrupt status and prevents him holding some roles in public organisations.
The £62,755 confiscation order covers his debts to HMRC and an uplift to reflect today’s value of money.
