Crooked magistrate jailed for VAT fraud which led to £1m of taxpayers' cash paid to his property firm Simon Price created bogus documents to make firm look more profitable It helped the company clinch major deals to build properties in Lancashire Clients were left with unfinished developments when firm was liquidated 45-year-old Price served as a JP in Preston between 2004 and 2009 Price was jailed along with fellow company director John Smith, 45 Jailed: Crooked magistrate Simon Price, 45, masterminded a £1m VAT fraud to clinch multi-million property deals for his construction firm A crooked magistrate who masterminded a £1m VAT fraud which helped him secure multi-million pound property contracts was jailed today. Simon Price, 45, was presiding over fraud and criminal cases whilst secretly creating bogus documents to make his construction firm look more profitable than it was. The fraudulent scheme with his long time business partner, who Price knew from childhood, helped clinch major deals to build properties in Lancashire. But clients were left with partially-finished developments in the Preston and Kirkham areas after Price's company Ice Blue Developments went into liquidation in 2011. Price - who served as a JP in Preston between 2004 and 2009 - was caught out following a routine inspection by taxmen when concerns were raised about the company's VAT returns. Documents were unearthed showing he and fellow company director John Smith had falsified invoices to claim VAT which was not owed. It resulted in more than £1m of taxpayers cash being paid out to them between September 2008 and December 2009. Price and Smith, also 45, had known each other for 35 years having been altar boys at their local church at the age of 10 and were godparents to each others children. Smith was best man at Price's wedding, but they fell out over the scam and have not spoken since. At Manchester Crown Court, Price, formerly of Lytham, now of Gretton, Gloucs, pleaded guilty to cheating the public revenue and 25 counts of making or supplying articles for use in fraud. He was jailed for 40 months and disqualified from being a company director for six years. He resigned from the bench in 2010. Smith, of Catforth, near Preston, who was also a director at Jack Smith Builders was convicted of cheating the public revenue and eight counts of making or supplying articles for use in fraud. Magistrate: Preston Magistrates Court in Lancashire where Price served as a JP between 2004 and 2009 He was jailed for three-and-a-half years in prison and disqualified from being a director for five years. Speaking after today's hearing, Simon De Kayne, assistant director criminal investigation at HMRC, said: 'This pair made incredibly crude attempts to falsify invoices and financial guarantees in a circle of fraudulent transactions. It was a complete cut-and-paste regime that unravelled as soon as HMRC officers investigated their business activities. 'The proceeds from the fraudulent VAT repayments were diverted into their bank accounts in an attempt to stave off their company's and own domestic debts. Partner: Father-of-three John Smith was jailed for three-and-a-half years for his part in the scam The fact that Price was an acting magistrate at the time of the fraud makes it more shocking. Earlier the court heard how Smith had studied building at Preston college and Price embarked on a career in design. Father-of-three Smith took on Jack Smith Builders, which had been established by his great grandfather, and in 1999 when he was approached to help build student accommodation in Preston he turned to Price for help. The project was a success and in 2003 they went into business for the development of land at Ashton Methodist church under the name Ice Blue Developments, with offices in the area. They then took on developments on the site of a disused petrol station in Freckleton, Preston, and secured a £3m contract for 20 apartments in Kirkham with New Fylde Housing. But victims of the pair included the New Progress Housing Group and student housing company Cosmopolitan. Work had started in September 2011 on a project with Cosmopolitan Housing with expected completion in August 2012. The company then became insolvent in December 2011 and work stopped, which meant university students who had expected to move in time for term were unable to. Cosmopolitan said this resulted in a loss in revenue of around £368,000. Smith and Price had their homes and offices searched. Price's laptop, which had drafts of false invoices from various firms on it, was seized. These include doctored invoices for building services received and faked correspondence from banks, solicitors and other institutions. The investigation uncovered letter headings from legitimate businesses that had been manipulated to create false documents. Examination of their email accounts showed Price and Smith referring to 'mickeying' up documents to suggest that Ice Blue was a reputable company and in good financial order to tender for contracts with local housing associations and to apply for bank loans. Sentenced: Manchester Crown Court, where Price and Smith were jailed and disqualified from being directors Passing sentence Judge Patrick Field QC told Price: 'This was a saga which brought misfortune and significant damage on many others and you were the principal actor' in the frauds. I find you were very much in charge. You were responsible in the creation of the overwhelming majority of documents. You were very much in control of the monies fraudulently claimed from HMRC. It is clear that had this fraudulent scheme succeeded the reward would have been substantial. In mitigation for Price, defence lawyer Miss Lisa Robert, said: 'He has lost everything. For the first seven months of 2012 he and his wife were living as a family homeless, from pillar to post. 'For a number of years he and Mr Smith's friendship remained constant - but they are now sat next to each other in a dock separated by a few feet and the chasm that is now between them is one which cannot be breached.'