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Hot tub “ponzi” trio jailed for fraudulent trading (30 June 2014)

Date: 30/06/2014
Duncan Lewis, Legal News Solicitors, Hot tub “ponzi” trio jailed for fraudulent trading

Stafford Crown Court has jailed three men who used a hot-tub company to defraud customers of more than £2 million.

The Daily Mail reports that the company Spaserve went bankrupt in 2010, owing £2.7m to customers.

However, it was discovered that the three men had channelled £1.2 million of customers’ money into their own accounts to pay for their lavish lifestyles.

During a three-month trial, the court heard that principal shareholder Simon Foster, 49, his business partner Stuart Cox, 40, and Spaserve’s office manager Jonathan Husselbee treated Spaserve as a “cash cow” to fund holidays abroad and expensive cars.

Between April 2007 and October 2010, the three used orders for hot tubs – which amounted to between £6m and £8m – to fund their own lifestyles, while only delivering 1,600 of the 2,000 hot tubs they had orders for.

The men told customers that the hot tubs were being made in the US and had to be shipped to the UK for delivery.

The court heard that the men kept changing delivery dates to prevent customers from cancelling their orders – and in some cases, did not order the hot tubs at all, but retained the money paid by customers.

The prosecution told the court that the men’s hot tub venture was “fraud from the word go”.

“This was a deliberate fraud – and was sophisticated,” the court was told.

“It caused a £2.7million loss, which is significant.

“Foster in particular spent the money on a lavish lifestyle which was born out of greed. By his own admission he said that, 'it's better to have lived a millionaire lifestyle and lost it, than to never have lived a millionaire lifestyle at all'.”

The court also heard that the hot tubs which were delivered were often manufactured elsewhere, rather than the US – and many were of substandard quality.

Foster, Cox and Husselbee were found guilty of fraudulent trading by a jury at Stafford Crown Court.

Simon Foster – from Lichfield in Staffordshire – received a three-and-a-half year jail sentence; while Stuart Cox – from Sutton Coldfield in the West Midlands – was jailed for two-and-a-half years.

Jonathan Husselbee – from Tamworth in Staffordshire – was jailed for two years.

Judge Amjad Nawaz said:

“While others were losing out, there was an element of self-enrichment because at the time they were still getting their money.

“Mr Foster was living a lavish lifestyle, a large house, three Porsches – one for work, one for his wife and one for social use; and his children had private education and foreign holidays.”

A woman who was defrauded of £4,500 by the trio said she was “thrilled” at the outcome of the trial. Kay Waterman from Southampton told the Daily Mail:

“This was a simple ponzi scheme, led by this man Simon Foster as a puppet master over Cox and Husselbee.”

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