Two company directors in Manchester, Benjamin Humphreys and Daniel Moore, have been sentenced to 21 months’ imprisonment each by Chester Crown Court for fraudulent trading at their debt solution company, Churchwood Corporate Services Limited (CCSL).
Mr Humphreys and Mr Moore were both also banned from acting as directors of a limited company for seven years. The convictions follow an initial investigation by the Official Receiver’s Office, Newcastle-Under-Lyme and an investigation and prosecution by the Department for Business, Innovation and Skills (BIS).
The court heard that between 2004 and 2006, Mr Humphreys and Mr Moore targeted companies who had been served with a winding-up petition from HM Revenue and Customs (HMRC).
The defendants persuaded the companies to sign up as clients, promising the owners and directors that CCSL would negotiate with HMRC for a delay in the winding-up proceedings. Instead of assisting them however, Mr Humphreys and Mr Moore took the client companies’ money and used it to fund their expensive lifestyles
In addition, Mr Humphreys and Mr Moore also charged the corporate clients 17.5% VAT on all invoices, despite the fact that CCSL was never registered for VAT with HMRC. When CCSL was itself wound-up in 2006, the two directors provided the Official Receiver with ‘doctored’ client invoices to disguise the fact they had fraudulently charged their clients VAT.
As a result of their dishonest trading, three client companies, all successful businesses albeit with cash flow problems, went into liquidation. The effects of this were devastating for the employees, who lost their jobs and the owners, who had invested their money into the companies.
Both directors pleaded guilty to fraudulent trading and misconduct in the course of winding up when they appeared at court on 26 July 2011. However, for legal reasons the sentencing hearing was adjourned until 16 May 2012.
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