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Dennis Michael Cook and his associate Paul Leslie Lester operated a classic long firm fraud, based in Worcester between 1995 and 1997. They obtained over £1 million worth of goods from over 50 suppliers before the scheme was stopped.
Cook operated with three trading names: Megatoys International, Central Meat Trading Company, and Boss Commodity Contracts. Each of these businesses were purported to be involved in a market trade in commodities purchased from suppliers and Cook used them to build up the confidence of suppliers and banks. Then, between May and December 1996, Cook and his associates used the businesses to obtain goods that they had no intention of paying for.
Several bank accounts were opened with five separate High Street banks so no single account manager had a clear picture of the business activity.
One of the main deceptions operated on suppliers, to induce them to supply or persuade them to wait for payment, was to produce bogus VAT returns for a rebate of more than £200,000 worth of VAT allegedly paid on goods exported to the Ukraine.
Other deceptions, often used in combination, were as follows:
- Post dated cheques which were stopped.
- Promises of payment which were not kept.
- Promises that payment would be made when the Customs & Excise paid large VAT refunds to the businesses.
- Assurances that the businesses were financially sound. These assurances were supported by falsified accounts and trading forecasts that were provided to suppliers.
- Falsely claiming that a freezer had broken down, ruining the contents supplied, and seeking to defer payment until and insurance claim had been processed.
- Claiming that goods supplied were faulty when they were not.
Cook and Lester were charged with an offence of conspiracy to defraud the creditors. Cook was additionally charged with two offences of fraudulently evading VAT.
In July 2000 Cook was convicted of both offences and sentenced to 5 years imprisonment. Lester was also convicted and sentenced to 21 months imprisonment. A third defendant was acquitted.
In February 2001 the Crown Court ordered the confiscation of the assessed proceeds of £1.3 million which Cook was ordered to pay, or serve an additional 5 years imprisonment in default.
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