Three businessmen from the Boston area were jailed on Friday after Lincoln Crown Court was told how they left behind a trail of debt after using sham companies to defraud firms out of thousands of pounds.
The three were among five men involved in the scam which netted sums of up to £100,000 from unsuspecting suppliers who provided goods and services on credit.
The longest sentence of 18 months was handed out to Herbert Hiley (Junior), 35, of Lockhamgate, Wrangle. He was convicted by a jury after trial on charges of fraudulent trading and fraud involving over £35,000. He denied the charges.
Matthew Tilling, 34, a mechanic of Seadyke Road, Old Leake, was found guilty of fraudulent trading and perjury. He was jailed for six months. He denied the charges.
Book keeper Justin Rushworth, 43, of Main Road, Benington, was jailed for eight months after admitting fraudulent trading and handling stolen goods.
Two other members of the Hiley family were not given jail sentences.
Herbert Hiley (Senior), 51, formerly from the Boston area but now living in France, admitted fraudulent trading involving over £100,000. He was given a 12 month jail sentence suspended for two years.
Alexander Hiley, 29, of Main Road, Stickney, admitted a £13,000 fraud involving double glazing supplied to his property which was not paid for. He was given a one year community order with 200 hours of unpaid work.
Herbert Hiley (Junior) and his father Herbert Hiley (Senior) were each disqualified for three years from holding a directorship or being involved in the management of a company. Rushworth was disqualified for two years.
Andrew Evans, prosecuting for the Department of Business Innovation and Skills, said: “These offences concern their involvement with a series of companies which were used to obtain goods on credit which were not paid for. These companies had a common feature in that they were set up and incorporated using the services of Justin Rushworth’s companies.”
Rushworth traded as Black & Severn Nominees and Secretaries Ltd and later as Rushworth & Partners Ltd operating at the time from premises in Wormgate, Boston.
He was appointed company secretary and in some instances was sole shareholder of the sham businesses used in the fraud.
Mr Evans said an investigation began after the collapse of Toynton Garages Ltd which left behind outstanding debts owed to both Jewsons and Jackson Building Centres.
Tilling was involved in the company and went on to commit perjury by lying to the Official Receiver.
Further inquiries led to not only Tilling but the other four defendants being prosecuted.
The largest fraud uncovered was carried out by Herbert Hiley (Senior) using Thompson Holidays (UK) Ltd, a company set up by Rushworth. The company went on to order over £100,000 worth of mattresses from Silent Night which were delivered to a warehouse near Boston and never paid for. The company later went into voluntary liquidation and no evidence was found that it had ever traded legitimately.
The offences took place on various dates between 2007 and 2010.
Ian Jobling, for Herbert Hiley (Junior), said the offences occurred some years ago and since then his client has stayed out of trouble.
“He has gone on to build up a good business with a good reputation.”
Mr Jobling, for Tilling, said he was not responsible for the idea of the fraudulent activity and it was ‘ridiculous’ to suggest that he was a leading light in what took place.
Zoe Van den Bosch, for Rushworth, said he had already repaid Jewsons for the boiler and bathroom equipment he admitted handling.
She said Rushworth was not involved in the day to day running of the sham companies.
“His company was used to provide a director and to provide a postal address. It is a service he provided not only to the Hiley companies but to other individuals. He was an extremely busy and relatively successful businessman.
“He is not a qualified accountant. He is a book keeper. His reputation is in tatters.”
Mark Kelly, for Herbert Hiley (Senior), said “These offences date from 2009. A great deal of water has passed under the bridge since then. He now lives in France and has lived there for a substantial amount of time. He regrets his involvement with this. It was out of character.”
He said his client has health problems and also helps care for a daughter who needs close supervision .
Roy Brown, for Alexander Hiley, said his life was in a complete mess at the time as he was using drugs and was heavily in debt. He was subsequently made bankrupt but has since made efforts to get his life back on track and no longer uses illicit drugs.