A BOSTON haulage company boss who carried out a £300,000 fraud was jailed for two years at Lincoln Crown Court.
The court was told how Michael Welbourn propped up his ailing family firm J.Welbourn and Son Ltd by using tax and national insurance deducted from his employees to repay creditors.
When the company was wound up it simply set up under another name and continued trading. The fraud continued with the company name then changed first to Welbourn and Son Ltd and then Welbourn Transport Ltd before finally going into liquidation in February 2010 with debts of £320,000.
Most of the outstanding debt was owed to Her Majesty’s Revenue and Customs.
Throughout much of the period Welbourn was actively managing the company flouting a ban he agreed to back in 2008 when he accepted a six year disqualification from being involved in the running of a company.
Emma Gargitter, prosecuting, said the money which should have been paid over to Her Majesty’s Revenue and Customs was fraudulently used to pay the company debts and keep it alive when it was insolvent.
In addition large amounts of money were syphoned off and not accounted for in the books although Welbourn claimed the money was cash payments to his drivers.
She said “There was a rolling fraud. As one company folded another company which traded fraudulently came into being.”
Welbourn, 62, of Freiston Road, admitted two charges of fraudulent trading and a further charge of taking part in the management of a company while disqualified from being a director.
The court was told that in January this year Welbourn signed an undertaking that he would not act as a company director for a period off 11 years.
Judge Michael Heath told him on Friday: “You should have stopped trading. The business was insolvent and unable to discharge its existing and ongoing liabilities to Her Majesty’s Revenue and Customs.”
Gordon Aspden, defending, said Welbourn mistakenly thought he could trade his way out of the financial difficulties.
He said Welbourn had run a successful haulage business from the 1970s through to 2003 when the firm began to experience adverse trading conditions.
“He ignored what must have been staring him in the face. It was through pride, sentimentality and willful blindness.
“He didn’t want to be at the helm of this ship when it went down. W he ought to have done in 2005 was pull down the shutters and stop trading.”
Mr Aspden said there was no evidence of Welbourn having an extravagant lifestyle and since his company went under he has been working as an HGV driver for another company earning just £230 a week.