Forbes acted in Landmark Fraud Case

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Business Crime Article

02 April, 2019

Craig MacKenzie and Craig Liversidge have acted for an accountant charged with multiple frauds and making employer-related investments. This was a high profile case widely reported in the press. It was the first case of its kind prosecuted by The Pensions Regulator (TPR).

Proceedings followed investigations by TPR and the Insolvency Service. TPR is the regulator of work-based pension schemes in the UK. The defendant was the trustee and administrator of Focusplay Retirement Benefit Scheme, which by February 2017 was said to have 305 members with a fund value of £17.4m.

The defendant had been running the fund since 2013, but between October 2014 and December 2016 he transferred £292,866.98 from the scheme into other accounts. Forbes Solicitors instructed Dan Thomas from Lincoln House Chambers and following negotiations with the regulators guilty pleas were entered to 5 counts of fraud, 2 counts of making employer-related investments and 1 count of acting in the management of a company when disqualified.

On 29th March 2019 the defendant appeared before Preston Crown Court for sentence. The Court heard how the defendant had used £121,000 to help purchase a home for his daughter, £104,000 was used to keep his daughters business afloat. £35,600 went to a company run by his son-in-law, £27,500 to a business he was trying to establish himself as an independent financial advisor, and £7,000 to pay a tax bill. Judge Nicholas Barker after hearing all the facts took an elevated starting point for sentence of 64 months for the frauds. This was due to the following aggravating features:

  • High degree of trust breached over a sustained period of time
  • Forgery of board meetings to cover tracks
  • More than a single act

Following mitigation on the defendants' behalf the Judge reduced that starting point by 10 months and also gave full credit for his guilty pleas. The following factors were taken into account:

  • Man of 66 years with previous good character
  • Numerous character references from well-respected individuals
  • Had paid back £78,000 plus £3,500 interest
  • £35,000 paid back before the investigation started
  • Genuine remorse

The overall sentence for the fraud matters was one of 35 months imprisonment. He was sentenced to a further 5 months in prison for acting in the management of a company when disqualified, giving a total sentence of 40 months.

In February pensions were making the headlines with the Secretary of State for Work and Pensions promising that the Government would hold to account employers who 'play fast and loose' with their employees' pension funds and the Government published its response to last year's consultation on strengthening the powers of TPR. In the wake of recent scandals at BHS and Carillion the government seems committed to ensuring that they protect pensions for those who have saved for their retirement. Going forward we may well see many more prosecutions of this nature brought by TPR.

For further information please contact Craig Mackenzie on 01772 220022.

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