Financing company boss banned over £4m false invoices
The boss of a financing company has been disqualified as a director for ten years after heading a false invoice scheme to secure £4m of illegitimate funds
9 Oct 2018
David Marsden, from Exeter, was the director of finance company First Capital Factors Limited (FCF). Incorporated in 2009, FCF offered recourse factoring facilities for small and medium businesses where they would buy a company’s invoices to provide them with advanced finance.
To be able to purchase their clients’ invoices, FCF secured funding from other companies. However, one of FCF’s funders spotted irregularities within FCF’s portfolio and sought advice from a business advisory firm in August 2016, who agreed with these concerns within FCF’s loan book.
The funder used its statutory right as a fixed charge holder to appoint an administrator and following further enquiries, it was discovered that Marsden instructed a number of his clients to produce false invoices, before he submitted them to FCF’s funders to secure illegitimate funds.
FCF operated a back-to-back receivables finance facility, where FCF would assign debts to the funder in exchange for 65% funding. An Insolvency Service investigation found that by using this method, Marsden fraudulently secured close to £4.3m before transferring money from FCF to other companies he was connected with in order to avoid paying his creditors.
Martin Gitner, deputy head of insolvent investigations for the Insolvency Service, said: ‘All the evidence pointed to Andrew Marsden orchestrating the scheme and he clearly controlled all the companies he colluded with to raise millions of pounds worth of false invoices.
‘His substantial ban will protect other creditors from suffering losses and improve standards in the marketplace. It should also act as a deterrent to others who may be tempted to misuse invoice finance facilities in order to secure illegitimate funds.’
Report by Pat Sweet