Director banned for assisting client’s £1.65m fraud
20 Dec 2018
An accountancy firm director has been given a 12-year disqualification from running companies after he helped one of his clients to defraud creditors of more than £1.65m
20 Dec 2018
Paul Manley, from Wembley, north-west London, was a director of County West Commercial Services Ltd, an accountancy firm based in Hammersmith which was incorporated in 1994.
The firm entered into creditors voluntary liquidation in August 2017, triggering an investigation by the Insolvency Service.
One of County West Commercial Services’ clients was Inn Take (UK) Ltd, a company which ran pubs on a short-term basis before it went into liquidation in December 2011. Two of its directors, William Lyall and Joseph Harthen, have subsequently been banned from running companies for eight and five years respectively.
In October 2016, the High Court ruled in favour of Inn Take’s liquidator that parties, including County West Commercial Services, knew about Inn Take’s intent in defrauding its creditors.
The fraud revolved around an outsourcing company being appointed to deal with the utility companies of Inn Take in April 2010 and from then to February 2011, over £1.65m was paid to them via a client account controlled by County West Commercial Services.
However, the High Court ruled that this money was taken from Inn Take ‘for no consideration on the pretext that they would pay creditors who were never, in fact, paid’.
Manley admitted that between 26 April 2010 and 14 February 2011, he caused County West Commercial Services Ltd to be a knowing party to the carrying on of a client’s business with the intent to defraud creditors.
As a consequence £1,654,451 of client funds were received by a bank account controlled by the company and distributed with no discernible benefit to the client.
David Brooks, chief investigator for the Insolvency Service, said: ‘In this serious case, Paul Manley operated his company’s client account as an “informal escrow” facility without proper regulatory permissions and with full knowledge of the reputations of the individuals concerned.
‘Accountants and other advisers should be wary of allowing their firms to be utilised in this way, enabling clients to pass funds through their accounts.’
Report by Pat Sweet