INSOLVENCY practitioner Kiran Kumar Mistry has been jailed for three years and six months after he was found guilty of conspiracy to defraud.
The disgraced IP’s sentence marks the end game in a decade-long investigation – Operation Barber – by officers from the Department of Business Innovation and Skills (BIS).
The court heard that nine Midlands companies were involved in the fraudulent activity between November 1998 and July 2007.
The companies 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 court was told that Mistry, 50, of Leicester, as the IP involved in eight of the nine companies, facilitated the fraud and enabled his co-conspirator Demitris Bains to continue to defraud creditors unchecked for a “considerable period of time”.
Back in 2012, in a landmark ruling, the High Court disqualified Mistry for 12 years because of his actions while liquidating a business.
That case was brought against Mistry by two Grant Thornton partners Nicholas Wood and James Earp.
In that case, Mistry was found to have diverted funds out of companies where he was acting as a liquidator and then to have paid the bulk of those funds to a Mauritian company which he owned.
Wood and Earp were appointed joint liquidators over 44 companies, in which Mistry was originally appointed, where they made the discovery.
Mistry was appointed liquidator to Safe Solutions Accounting Limited and Safe Solutions Accounting Services. The Safe Solutions companies masterminded a tax fraud which deprived HMRC of about £41m in unpaid taxes. While liquidator Mistry transferred funds to Independent Insolvency Advisory Services (IIAS) for no apparent reason, which was owned by Goddards accountant Derek Williamson. Goddards’ principal was involved in the tax fraud at Safe Solutions.
IIAS then transferred the funds to Dreamcast which was incorporated in Mauritius and that Mistry wholly owned and controlled.
At the most recent trial, 33-year-old Florence Hoxha, of Enfield, was deemed not guilty in relation to a single count of fraudulent trading of Bluechip Innovations Ltd. David Wright, 40, of Fleetwood, pleaded guilty to one count of fraudulent trading at Millstyle Ltd.
Also sentenced for the same crimes at Southwark Crown Court was David Wright, to 18 months imprisonment, suspended for two years with a community punishment order of 160 hours.
This was the second trial connected with Operation Barber. The first, concluding in February 2014, involved eight defendants with guilty verdicts slapped on Eric Harris, 73, of Nottingham; Sukhi Samrai, 49, of Leicester and Phillip Williams, 55 of Sutton in Ashfield, Nottingham.
Ringleader Demitris Bains, 52 of Ravershead, Nottinghamshire, pleaded guilty to conspiracy to defraud whie his sister, Kiran Dillon, 47 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. 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.
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.”
Kumar and Wright were sentenced on 28 January.
Three new partners and seven business restructuring advisers have been appointed to the new Preston office
The average cost of fraud increased 35.4% to £3.9m in 2016, compared to 2015 data
Political and economic uncertainty behind the fall in confidence
Partner at Pinsent Masons says Serious Fraud Office has secured 'one of the top ten enforcement actions of all time'