Managers face jail over invoice finance fraud
TWO executives at Insight (1997), a Salford healthcare firm that specialised in looking after people with autism, have been convicted after carrying out a £1.2m invoice finance fraud.
Administration manager Christopher Lynch, was found guilty of conspiring to defraud Surrey-based invoice lender Resource Partners on Monday at Manchester Crown Court.
The company’s managing director, James Frauts, pleaded guilty at earlier hearings to conspiracy to defraud, fraudulent trading and false accounting. The offences span from May 2002 to July 2004. The defendants could be jailed for up to 10 years when they are sentenced on December 3.
Insight provided care to people with autism for local authorities in the North West. By 2004 the business had an annual turnover of around £3m, employed 150 staff and operating 13 care homes.
But in 2002 Frauts, 62, who owned Insight, and Lynch, 59, began falsifying invoices which they used to raise credit from Resource Partners. More than 170 false invoices were processed – 45% of the bills sent by Insight to Stockport, Rochdale, Lancashire, Bury and Warrington councils.
Insight eventually collapsed in 2004 after Resource had paid out more than £1.2m. Some of these losses were then passed onto the local authorities who had to take money out of their social service budgets, said the Serious Fraud Office (SFO).
The case was referred to the SFO in October 2005 by the Greater Manchester Police. Frauts was charged in December 2009 after being extradited from Canada.
