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Legislation & Litigation

10-year investigation ends as final offenders are sentenced

By CreditMan Friday, February 5, 2016

Kiran Kumar Mistry, an Insolvency Practitioner, was sentenced to three years and six months imprisonment and David wright, also a defendant, was sentenced to 18 months imprisonment, suspended for two years with a Community punishment order of 160 hours, for conspiracy to defraud involving nine companies.

Both men were sentenced on 28 January 2016.

The trial of Kiran Kumar Mistry, 50 years, Leicester and Florence Hoxha, 33 years, at Southwark Crown Court concluded on the 9 December 2015 when the jury found Kiran Kumar Mistry guilty of conspiracy to defraud nine companies which were investigated by officers from the Department of Business Innovation and Skills (BIS) under the name Operation Barber.

The companies involved were Millistyle Ltd, Britannia (Construction Supplies) Ltd, Fabricat Ltd, Woodpro Ltd, Sharpe Developments Ltd, All Aspects Construction Ltd, RMD Imports Ltd, Bluechip Innovations Ltd, and Real Estate (Midlands) Ltd.

The fraudulent activity operated from November 1998 until July 2007.

The investigation found and the court heard, Kiran Mistry as the Insolvency Practitioner involved in 8 of the Operation Barber companies, facilitated the fraud thereby enabling his co-conspirator Demitris Bains to continue to defraud creditors unchecked for a considerable period of time.

Florenc Hoxha, was found not guilty in relation to one count of fraudulent trading of the company Bluechip Innovations Ltd. A further Defendant David Wright, 40 years, pleaded guilty to one count of fraudulent trading of the company Millstyle Limited.

This was the second trial in relation to the offending in Operation Barber. The first, involved eight defendants and concluded on the 28 February 2014 with guilty verdicts against the Defendants Eric Harris, 73, of Nottingham and Sukhi Samrai, 49, of Leicester, Phillip Williams, 55 years of Sutton in Ashfield, Nottingham.

Demitris Bains, 52 years of Ravershead, Nottinghamshire, the ring leader pleaded guilty to Conspiracy to Defraud and his sister, Kiran Dillon,47 years of Newark, Nottinghamshire, pleaded guilty to the fraudulent trading of all nine companies.

Two other Defendants Simon Ludgate, 48, of Mansfield Woodhouse, Nottinghamshire and Calvin Harris, 52, of Newark, Nottinghamshire entered guilty pleas at the start of the trial. The defendant Jonathan Paul Noon, 49 years, was found not guilty by the jury.

Sentencing against all seven Defendants took place at Southwark Crown Court on the 9 May 2014 when a collective total of just over 17 years imprisonment was handed down.

His Honour Judge Pegden said the case involved:

A massive fraud of £5 million involving nine companies over a period of seven years which had undermined local business confidence and had caused loss to small traders and businesses which were repeatedly targeted by those involved, most notably Kiran Dillon who assisted her brother Demitris Bains as she was pivotal to gathering the credit and making the fraud work. Her multiple aliases made it impossible for creditors to identify her as having defrauded them previously.

Bains, he said, carefully planned the fraud, controlled it and benefited with funds used for expensive cars, pensions and helicopter lessons.

A particular feature of the fraud was Bains’ loans to the companies involved from various sources some abroad with punitive rates of interest in default which allowed him financial control and enabled him to fold the respective companies when it best suited him.

Taking into consideration early guilty pleas and applying the relevant discounts, HHJ Pegden gave the following sentences:

Demitris Bains - four years and nine months imprisonment with a Disqualification Order for a period of 12 years

Kiran Dillon - four years and three months imprisonment with a Disqualification Order of 12 years

Simon Ludgate - three years and three months imprisonment with 9 months imprisonment concurrent for acting in the management of a company whilst disqualified

Calvin Harris - two years and eight months imprisonment with nine months imprisonment concurrent for acting in the management of a company whilst disqualified

Eric Harris - two years and six months imprisonment

Sukhi Samrai - 21 months imprisonment which was suspended for 18 months. She also received a Supervision Order of 18 months

Philip Williams -two years imprisonment suspended for two years in addition to a £2,500 fine

Glenn Wicks, the officer in charge of the BIS investigation, said:

These people deliberately set out to defraud local builders and builders’ merchants who, in some cases, nearly lost their livelihoods. In January 2007 we worked with three police forces across Derbyshire, Leicestershire and Nottinghamshire with 140 staff executing 31 warrants. It was and still is the biggest operation of its time and it stopped these criminals dead in their tracks.

The insolvency regime relies entirely on the professionals within it being honest. Kiran Mistry was a qualified and licensed insolvency practitioner who has been proved to be corrupt and a shame to his profession. Rather than reporting criminality as he was legally bound to do, he was actually involved in committing the frauds and then covering them up.

BIS will crack down on anyone trading fraudulently and the prison sentences handed out show that the courts will deal with offenders severely.

Source - The Insolvency Service