Managers jailed for invoice finance fraud
TWO executives at Insight, a Salford healthcare firm that specialised in looking after people with autism, have been jailed after carrying out a £1.2m invoice finance fraud.
The company’s managing director James Frauts and administration manager Christopher Lynch were jailed for 40 months and 22 months respectively at Manchester Crown Court on Friday.
Frauts pleaded guilty at earlier hearings to conspiracy to defraud, fraudulent trading and false accounting. Lynch was found guilty of conspiring to defraud Surrey-based invoice lender Resource Partners at a trial in October. The offences occurred from May 2002 to July 2004.
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 operated 13 care homes.
But in 2002 Frauts, 63, 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).
Frauts was also disqualified from acting as a director for seven years and will be deported to serve the rest of his sentence in Canada. Lynch must pay £10,000 towards costs.
