The previous chief government of collapsed minibond firm London Capital & Finance has acquired a 10-month jail sentence for contempt of court docket after failing to declare £95,000 to UK Critical Fraud Workplace investigators.
Michael Thomson, often known as Andy, was sentenced to 10 months in jail, suspended for 2 years, at a listening to at London’s Southwark Crown Court docket on Wednesday for breaching a restraining order on his property obtained as a part of the SFO’s ongoing probe into LCF.
Thomson’s is the primary conviction stemming from the SFO’s investigation into LCF, whose £236mn collapse in 2019 meant greater than 11,000 retail clients, together with pensioners and first-time buyers, confronted shedding their financial savings. The agency promised returns of as a lot as 8 per cent by so-called mini bonds.
Thomson’s conviction doesn’t relate to occasions main as much as LCF’s collapse however reasonably to his behaviour through the SFO’s subsequent probe.
Handing down Thomson’s sentence on Wednesday, Choose Alexander Milne mentioned it was “elementary to our system that orders of the court docket be revered and noticed”, including there have been “many situations . . . through which the court docket’s angle can be to commit an individual instantly to jail”.
Nevertheless, he mentioned, delays meant “this has been hanging over Mr Thomson and his household . . . for 3 years or extra”. Thomson’s admissions to the court docket, state of well being and up to date compliance additionally justified a suspended sentence, Milne mentioned.
At a listening to in July final 12 months, the SFO mentioned Thomson had hidden £95,000 from investigators, in breach of an asset freeze put in place in 2019. Throughout that listening to, Thomson admitted to failing to declare the cash whereas his property had been restrained, however mentioned the 2 breaches had been unintentional.
The sum included a £55,000 stamp-duty refund from HM Income & Customs and a £40,000 insurance coverage payout for injury at a barn which was coated by his insurance coverage, however which he didn’t personal. Each funds went into the checking account of his spouse, Debbie, which was not frozen.
Thomson spent the cash on a £5,000 vacation in Italy, £3,000 on the retailer Subsequent, £4,000 on a scorching tub, in addition to different bills to fund the couple’s life-style, in accordance with the SFO.
On Wednesday the company’s barrister, Catherine Collins, mentioned: “The cash was spent, and spent quickly.”
Collins mentioned a go to to the barn final August revealed a “roofless, three-sided picket body propped up in locations by items of timber”. She added: “The truth is he spent the cash obtained by these two sources on himself.”
Thomson’s barrister, Genevieve Reed, mentioned on Wednesday that Thomson had already admitted to having used the stamp-duty refund to pay his residing prices, including he had been “upfront, and accepts what these sums of cash had been [used] for”.
She mentioned restore work had been undertaken on the barn too, including that the insurance coverage declare was not “a bid to extract cash and conceal that from the SFO”. Thomson had admitted the breach, she mentioned, “and will have declared [the payout] as an asset beneath the phrases of his restraint order, after all he accepts that”.
LCF promised returns as excessive as 8 per cent by its minibonds, which in some circumstances erroneously claimed to have particular person financial savings account standing and had been described as “fixed-rate Isas”.
Whereas LCF held authorisation from the UK monetary regulator, its merchandise had been unregulated, high-risk minibonds, which funded small companies similar to London Oil & Gasoline, which itself fell into administration in 2019.
The SFO continues to be investigating the scandal. Since March 2019 the company has arrested 5 people, who had been all later launched pending additional investigation. Two different people have additionally been questioned in reference to cash laundering offences in relation to the probe.