Stephen Joseph Beet, a bankrupt who acted as a shadow director at UPVC Trade Frames (Hull) Ltd, has been sentenced to14 months imprisonment at Hull Crown Court.
The conviction follows an initial investigation by The Insolvency Service and a full criminal investigation and Prosecution by the Department for Business Innovation and Skills (BIS).
Mr Beet pleaded guilty to the use of a prohibited name, acting in the management of a company whilst an undischarged bankrupt, fraudulent trading and forgery.
Commenting on Mr Beets conviction, Deputy Chief Investigation Officer, Mike Williams said:
Mr Beets conviction sends a clear message that bankrupts who fail to abide by the restrictions imposed on them can expect to be investigated and brought to justice.
The investigation showed that, Mr Beet set up a new company, UPVC Trade Frames (Hull) Ltd, which supplied and installed double glazing.
The company was incorporated following the failure of two similar ventures, Trade Frames (Hull) Ltd and Trade Frames. Mr Beet was the sole director of Trade Frames (Hull) Ltd which went into liquidation in February 2006. Trade Frames, a sole trading business was set up in February 2006 and also run by Mr Beet.
The name Trade Frames was prohibited because a similar name had been used in the previous liquidated company of which he had been a director. This business was unsuccessful resulting in personal debts and Mr Beets bankruptcy.
He was not named as a director, but acted as such, arranging overdrafts with the banks, attending meetings at the banks, recruiting salesmen, dealing with the bailiffs and inspecting suppliers products. People who are bankrupt are prohibited from being directors of a company without the permission of the court.
The company provided low quotations to secure business and took deposits from customers knowing that the business could not meet its obligations. The customers either received incomplete services or in some cases, no work was done at all while no money was paid to creditors. This resulted in a loss of 23,000 to customers and a 208,000 debt to its creditors.
Money paid to the company was also diverted to Mr Beet, and in one instance, a customers cheque for 350 was altered to show the defendant, not the company as the payee.
In sentencing Mr Beet, Mr Recorder McKone said
You have shown a persistent and dishonest flouting of the law over 3 years resulting in substantial loss to others.
Your offending is so serious only immediate custody is appropriate