Fraudulent miners’ charity trustee ordered to repay over £200K
17 May 2019
A former union official who was a trustee of a miners’ charity and used its funds to pay for private building works has been ordered to repay over £200,000 following a Charity Commission investigation, which highlighted concerns over risks that can arise from charities being closely linked to a non-charitable organisation
17 May 2019
The regulator opened a statutory inquiry into Nottinghamshire Miners Home (NMH) in August 2007 after the Serious Fraud Office (SFO) raised concerns that the charity’s trading subsidiary, Phoenix Nursing and Residential Home Ltd (PNRHL), may be being misused for the private benefit of trustees A and B and their families.
The charity’s governing document provided for up to five charity trustees, three being nominated by the Union of Democratic Mineworkers Nottingham Section (UDMNS). They are referred to in the report as trustees A, B and C, although trustee A has been identified as Neil Greatrex, who headed up the breakaway miners’ union.
The inquiry liaised closely with the SFO and South Yorkshire Police. Commission investigators used powers to obtain information from the banks of NMH, PNRHL, the trustees and the charity’s accountant, which revealed that Greatrex and trustee B benefitted from £150,000 of charitable funds, through fraudulent invoicing, which were spent on building works carried out at private properties connected to the two trustees. These included installing a new kitchen and a pool for ornamental koi carp.
The Commission provided witness statements to support the prosecution, and gave evidence at the hearing in 2012, which resulted in Greatrex being convicted of 14 counts of theft and automatically disqualified from trusteeship. Trustee B was found not guilty, but the Commission maintained that they were responsible for misconduct and/or mismanagement.
A claim was made under the Proceeds of Crime Act, and Greatrex was ordered to pay over £200,000 compensation to the charity, including over £50,000 in interest.
At the time the inquiry opened, the charity had informed the Commission that it intended to sell a care home in Lincolnshire which it leased to PNRHL, claiming that it was failing as a result of the decline of the mining industry.
Concerned that some £1.5m in sale proceeds could be at risk, the inquiry placed legal restrictions on the charity’s bank accounts, those of its trading subsidiary and on the charity’s solicitor. Both Greatrex and trustee B were suspended from their roles, and the Commission appointed an interim manager to take over the management of the charity in 2008.
Following interviews and further examination of evidence, the inquiry concluded that all three trustees failed to adequately discharge their legal duties as trustees. They also failed in their responsibility to review the performance of the trading subsidiary in administering the care home.
Greatrex and trustee B’s use of charitable funds for private building works, and unauthorised personal benefit clearly amounted to serious misconduct and mismanagement in the administration of the charity, the Commission found.
Harvey Grenville, head of investigation and enforcement at the Charity Commission, said: ‘This case involved an appalling and cynical misuse of funds intended for deserving people. Through the diversion of money for personal comfort, vital resources were taken from those they were there to help.
‘Our intervention provided vital support to prosecutors, ensured that those responsible faced the consequences of their actions and enabled the sizeable recovery of charity funds. This should send a strong signal that this type of abuse will not be tolerated.’
The Commission worked closely with the interim manager and newly appointed trustees to ensure that the recovered and remaining funds could be put to good use, and £1,142,573 was transferred to Nottingham Miners Welfare Trust Scheme (to support people connected with the Nottinghamshire area coal field, including vulnerable beneficiaries.
NMH was wound up and removed from the register of charities in January 2017.