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11 Year Director Disqualification Undertaking

11 Year Director Disqualification Undertaking

11 YEAR Director Disqualification for Haulage Bosses for Falsifying VAT Claims

This recent director disqualification case illustrates well how when insolvency looms, it is vital that Directors take specialist legal advice, rather than go off on a frolic of their own in an attempt to solve their problems. Such action almost always makes things worse, and significantly so in this case, where the penalty was an 11-year director disqualification for falsifying VAT claims

Background to this Case

Mr David Cooper (‘Mr Cooper’), the Director, of CFM Transport Ltd (‘the Company’) has accepted a Director Disqualification Undertaking for a period of 11 years.

In early 2015, one of the Company’s vehicles was involved in an accident abroad. While waiting for the insurance claim to be settled and the Company’s petroleum tax refund entitlements to be received, Mr Cooper submitted false VAT claims in an attempt to keep the Company afloat.

Mr Cooper’s wrongdoing was discovered and with the prospect of criminal proceedings looming for tax related fraud, he opted to cease trading.

Following the end of the liquidation process, the Insolvency Service looked in to Mr Cooper’s role in the collapse of the Company, and the associated trading entities. Those investigations revealed that Mr Cooper had knowingly created and submitted false Returns in order to claim VAT to which the Company was not entitled.

On 8 October, the Secretary of State accepted a Disqualification Undertaking from Mr Cooper, after he admitted knowingly creating and submitting false Returns to reclaim VAT to which the Company was not entitled. His ban is effective from 29 October 2018 and lasts for 11 years.

The Insolvency Service’s Comment

Robert Clarke, Chief Investigator for the Insolvency Service, commented:

The public can be assured that where there have been abuses of public finance provisions which result in losses of this type, the Insolvency Service will investigate the conduct of the parties involved and take action to remove the privilege of limited liability trading for a lengthy period. Directors have a firm duty to ensure they deal properly with tax matters and pay what is due. Mr Cooper has paid the price for failing to do that, as he cannot now carry on in business other than at his own risk.”

Comment From Our Director Disqualification Solicitors

The length of the Director Disqualification given out in this case, shows the seriousness with which the Insolvency Service view such conduct. 11 years approaches the maximum possible length of ban of 15 years. Such conduct will almost inevitably run the risk of:

  • Parallel Criminal Law investigation.
  • Criminal Compensation proceedings.
  • Director Disqualification Compensation proceedings.

The team at NDP are experienced in dealing with such claims. Click here to see testimonials for our work.

For help and advice on defending yourself if threatened with disqualification, talk to our Director Disqualification Solicitors by calling us on 0121 200 7040, or contact us. The earlier you make contact, the more we can do to help.

Director Disqualification for Pension Scammers

Director Disqualification for Pension Scammers

Pension Bosses Banned for 34 Years for £57 Million Pension Scam – Our Director Disqualification Solicitors Comment

Misleading the public is never an allegation that is going to end well for the delinquent Director. This case (essentially about a pension scam), which resulted in a total of 34 years of director disqualification between 4 directors, following the transfer of million-pound pension funds and an Insolvency Service investigation, demonstrates the point.

Background to this Director Disqualification Case

Mr Karl Dunlop (‘Mr Dunlop’), Mr Stuart Grehan (‘Mr Grehan’) and Mr Ian Dunsford (‘Mr Dunsford’) had previously accepted Director Disqualification Undertakings for their management roles within the group of companies involved in the transfer of funds.

Mr Dunlop, the Director of Imperial Trustee Services Ltd (‘Imperial’), accepted a 9-year Director Disqualification Undertaking for failing to act in the best interests of pension members and subsequently failing to ensure investments were adequately diverse.

Mr Grehan, Director of Sycamore Crown Ltd (‘Sycamore’) and, agreed to a 9-year ban as a result of false and misleading statements made to encourage investors to transfer their pension pots.

Mr Dunsford, Director of Omni Trustees Ltd (‘Omni’), agreed to a voluntary ban for 7 years for failing to act in the best interests of pension members and subsequently failing to ensure investments were adequately diverse.

Mr Stephen Talbot was not formally appointed a Director of Transeuro Worldwide Holdings Ltd (‘Transeuro’) but accepted a 9-year Director Disqualification Undertaking for failing to explain what happened to millions of pounds worth of assets.

The Insolvency Service’s Investigation

The investigation centred on the conduct of the Directors connected with Transeuro, who helped fund 2 introducer firms – Sycamore and Jackson Francis Ltd (‘Jackson’).

The introducer firms cold-called members of the public, inviting them to transfer their pension pots into Self Invested Personal Pension plans (‘SIPPs’) and pension schemes operated by Omni and Imperial, who provided Trustee and Administrator services for 2 occupational pension schemes – Henley Retirement Benefit Scheme (HRBS) and Capita Oak Pension Scheme (‘COPS’).

The Directors Misled the Investors

Insolvency Service Investigators found that the introducers from both Sycamore and Jackson misled clients about their expertise and experience, offering ‘guaranteed’ returns designed to encourage them to transfer their existing pension funds.

As a result, more than £39,000,000.00 was paid into SIPPs, over £10,000,000.00 into COPS and more than £8,000,000.00 to HRBS. Members’ funds were then largely invested in unregulated investments in storage units which ultimately did not yield the level of returns promised to members.

The Insolvency Service’s Comment

Mr Ken Beasley, Official Receiver for the Insolvency Service’s Public Interest Unit, said that unfortunately he has seen an increase in cases where members of the public have been persuaded to transfer their hard earned pension pots into new schemes on the basis of unsubstantiated promises of higher returns which inevitably never materialise.

Our Director Disqualification Solicitors Comment

The length of the Director Disqualifications given out in this case, shows the seriousness with which the Insolvency Service views such conduct. Such scams have become all too common following the introduction of ‘Pension Freedoms’ in April 2015. Misleading investors is never an attractive picture.

Collateral or parallel criminal law or compensatory proceedings may follow against the Directors.

The team of director disqualification solicitors at NDP are experienced in dealing with such claims. Click here to see some of our testimonials. For help and advice on defending yourself if threatened with disqualification, talk to our Director Disqualification Specialists by calling us on 0121 200 7040, or contacting us. The earlier you earlier you get in touch, the more we can do to help.

Director Disqualification Predictions

Director Disqualification Predictions

Directors Under Continued Attack? Likely Future Trends in Director Disqualification

In a previous article we looked at 8 key current trends which our Director Disqualification Solicitors have noticed over the last 12 months. In this article, looking deep into our crystal ball, we predict what we think might happen during the next 12 months in the world of director disqualification.

First, a Recap of the 8 Current Trends in Director Disqualification

We have identified (and discuss below) the following current 8 trends:

  • CURRENT TREND 1 – New types of (allegedly) unfit conduct being investigated and pursued by the Insolvency Service (‘IS’) against Directors.
  • CURRENT TREND 2 – IS investigating and pursuing Criminal law offences via the Director Disqualification route.
  • CURRENT TREND 3IS pursuing Director Disqualification cases against Directors where the company is not even in a formal insolvency.
  • CURRENT TREND 4 – Admissions made by Directors in (Civil) Director Disqualification proceedings coming back to haunt Directors in Criminal proceedings.
  • CURRENT TREND 5 IS investigating and pursuing allegations of unfit conduct relying upon unproven and disputed matters of fact.
  • CURRENT TREND 6 – ‘What, no draft evidence?’
  • CURRENT TREND 7 – Internal procedures within the IS – potential for actual conflict of interest.
  • CURRENT TREND 8 – Breaches of Disqualification Orders and undertakings: ‘Go straight to jail’.

What Lies Ahead in Director Disqualification for 2019 and Beyond? Our Predictions

As specialists in Director Disqualification, these are some of the things that we think are bubbling under.

  • FUTURE TREND 1 – Director Disqualification Compensation Cases

The Law has changed to allow for cases, where financial compensation is sought from the Director, in addition to his/her Disqualification.  As yet, we have not seen a single such case brought by the IS.  We anticipate however that we will see such cases during 2019.  The Section 16 Letter currently tells the Director whether or not Compensation proceedings are anticipated.  The answer so far has been ‘No’.  We expect however to see such cases pursued in the coming months.

  • FUTURE TREND 2 – More Criminal Law proceedings and more Directors serving actual time in PRISON

The IS and BIS employs and runs specialist teams of Criminal Investigators looking specifically at offences relating to corporate failures as we reported during 2017.  We expect to see the number of Criminal cases against delinquent Directors (whether within Disqualification proceedings or generally) increase in the coming months, whether arising from, for example:

  • Failing to maintain/preserve/deliver up company books and records.
  • MTIC Fraud.
  • Breach of existing Director Disqualification Order/Undertaking and/or aiding and abetting such breaches (NDP is presently instructed on 4 such cases).
  • Fraud in anticipation of company winding up (section 206 of the Insolvency Act 1986 (‘the IA 1986’)) to include:
    • Concealing the company’s property or concealing debts due to or from the company.
    • Fraudulently removing the company’s property.
    • Pawning, pledging or disposing of company property obtained on credit that has not been paid for.
  • Transactions in fraud of creditors (section 207 of the IA 1986) to include:
    • Causing or making a gift or transfer from company property.
    • Concealing or removing any part of the company’s property.
  • Misconduct in the course of winding-up (section 208 of the IA 1986)

Fear not however!

There are Statutory and Common Law defences that can be deployed and used in answer to many of the above alleged offences. The key is to deploy and use the defences to best advantage.

  • FUTURE TREND 3 – Pursuing Director Disqualification cases against Directors where the company is not in a formal insolvency

We have addressed this in an earlier article. Such cases are pursued most commonly under section 8 of the CDDA.  Again, we expect to see more such cases pursued in the last months of 2018 and 2019.

  • FUTURE TREND 4 – Dissolved companies

We predict this will be a ‘biggy’!  On 26 August 2018, the IS and BIS announced a:

 ‘….new crackdown on reckless Directors, specifically those who have dissolved companies to avoid paying workers or pensions.’

This announcement followed (perhaps inevitably) as a Government reaction to the BHS debacle.  It is said that such Directors will be targeted for disqualification and fines.  On the face of it, an overdue remedy for a perennial problem.  How will it develop, however

Directors dissolving a company (rather than liquidating it) and being open to scrutiny to avoid paying creditors is a big problem that needs addressing.  We expect to see many disqualification cases in 2019 arising out of dissolved companies, where creditors are left unpaid.

Conclusion – Contact Us if Threatened With Director Disqualification

The world of Director Disqualification law and practice remains a moving feast, and we expect to see many, if not all, of the above predictions come true in 2019. However, one thing that remains a constant is that every Director faced with a Director Disqualification investigation needs to obtain the right advice at the earliest point and thus needs to act decisively.

Acting positively, decisively and quickly will always help the cause of the Director under attack.  Having the best legal advice available is the second part of that jigsaw.

There are lots of things the Director under attack can do.  Each and all of the matters dealt with above, merit and deserve an article to themselves. NDP are extremely well placed to help in respect of all such matters – click here to see some testimonials.

If you are a director threatened with disqualifcation, please contact us or call us on 0121 200 7040. Our director disqualification solicitors will be happy to discuss and advise you on the best course of action. The initial conversation is free.