Crime Solicitors

An investigation by the Insolvency Service has led to a network of phantom construction and engineering companies being wound up.

The court heard how 15 companies had been bought “off the peg” from two company formation agents by an individual calling himself Jonathan Hunting.

The investigation found that the construction and civil engineering companies reported combined sales of more than £50 million and assets of £8.4 million, but were run solely as instruments of fraud to obtain credit by filing false accounts and other false information.

Petitions to wind up the companies were issued and presented by the Secretary of State for Business, Innovation & Skills, following confidential enquiries carried out by Company Investigations, part of the Insolvency Service.

Although the companies were dormant and had never traded while under the control of the formation agents, after they had been bought and activated by the new owner, fictitious directors were appointed – and the dates of their appointments were backdated by several years to the date of incorporation of the relevant company, in order to lend legitimacy to the false accounts filed by the new owner.

The false accounts reported significant assets and trading since incorporation by some of the companies.

The companies had no physical presence at their registered offices located in different parts of the country – and ostensibly each was independently owned and operated.

Company Investigations Supervisor, Chris Mayhew, said:

“These supposedly unrelated companies had no legitimate purpose and existed solely to seek to obtain easily disposable goods on credit – including expensive motor vehicles on lease finance, with no intention of paying for them.

“False accounts were filed by some of the companies to create the impression that they were substantial and creditworthy businesses and had been trading profitably for a number of years, which the investigation found to be blatantly untrue.

“Where no trading accounts had been filed, the first step – backdating the date of the director’s appointment – had been taken to continue with the fraud.

“I would urge businesses approached for credit to question why a potential new corporate customer would choose to backdate the appointment of its recorded officers – and to file accounts showing significant trading and assets, at a time when clearly the company was still on the shelf of the company formation agent, dormant awaiting sale.

“We work closely with a number of partners – such as Companies House –
to prevent the abuse of the corporate regime by such deliberate lack of transparency; and the Insolvency Service will continue to investigate and bring to a halt companies harming or about to harm legitimate business by operating in this way.”

Duncan Lewis Fraud Lawyers

Duncan Lewis fraud lawyers can advise at any stage of a charge involving fraud, including charges relating to company fraud, financial fraud, false accounting, Ponzi schemes and investment fraud.

There are Duncan Lewis offices nationwide and a Duncan Lewis fraud lawyer can attend interviews with investigating authorities such as SFO, FCA. Insolvency Service, BIS, HMRC and City of London Police.

For expert legal advice on all fraud charges, call Duncan Lewis fraud lawyers on 0333 772 0409.

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