Carlisle van boss left banks with £4.5m of losses, court told
Last updated at 12:33, Wednesday, 14 March 2012
A company boss landed the banks which financed his business with losses of £4.5m after he sold 290 vehicles he had not finished paying for, a court heard.
Carlisle Crown Court was told that Richard Dixon, 45, effectively sold cars and vans even though they did not belong to him because he was still buying them through hire purchase agreements.
On the first day of his six-week trial yesterday, Jeremy Grout Smith set out the prosecution case against the businessman, the sole shareholder in the firm Just Vans Self Drive Limited.
Dixon, of Longthwaite Farm Court, Warwick Bridge, denies three counts of fraudulent trading.
Opening the case, Mr Grout-Smith told the jury Dixon ran his business from Carlisle, its main activity being the renting out of vehicles.
But he also bought and sold them. “In many cases,” said the barrister, “Just Vans when they sold vehicles did what they should have done and passed the sale proceeds onto the banks.
“It’s the prosecution case that they disposed of about 290 vehicles and kept the money, and they kept the money for the company without telling the banks, which the Crown say was dishonest and fraudulent conduct; and when Just Vans went bust, the banks lost out, as did many of the people who bought those vehicles.
“Just Vans had also expanded into the luxury car hire business, renting out Bentleys, Ferraris, Aston Martins and similar vehicles from a base in London.
“Towards the end of 2007 there was a global financial crisis which, of course, impacted on that market.
“Despite suffering heavy losses, Mr Dixon continued to trade when he knew he was putting his creditors, the people who he owed money, at risk. In the end, the banks suffered losses in the region of £4.5m, for the most part caused by the defendant’s dishonest conduct.”
Mr Grout-Smith went on to outline the prosecution case in greater detail, explaining how two of the three charges covered the alleged fraudulent sale of vehicles on dates in 2006, 2007, and 2008.
Mr Grout Smith said Dixon was the only director, and the only shareholder of his business, which he ran from Cocklakes near Cotehill.
The barrister explained that Just Vans made money by renting out vehicles which it was buying through hire purchase agreement with various banks. The firm would pay an initial large deposit, followed by monthly payments. Until the last payment was made, the vehicle remained the property of the bank.
“Those vehicles are the bank’s security for the loan that they have made to Just Vans,” said the barrister. “If a dealership sells a vehicle on HP to somebody else without notifying the bank, they are not only in breach of contract, but they permit a criminal offence.“The vehicle is not theirs to sell. But if the buyer is deceived into thinking it is then the offence of fraud has been committed.“If they told the buyer that the vehicle belongs to the bank and not to them then the buyer would not want it.”
The third allegation of fraudulent trading, he said, was committed when a director continues to trade when he knows there is a risk that his creditors will not be paid.
“The prosecution maintain that by February 2008, the defendant was carrying on the business of Just Vans and knew there was a risk that the company would not be able to meet its debts as they fell due. “The prosecution will say the situation was truly hopeless.”
Mr Grout-Smith said that at a 2008 meeting with the relevant banks – including his main lender Royal Bank of Scotland – Dixon told those present he had embarked on a “major disposal” of prestige cars in April that year.
The barrister said Dixon told the meeting: “In the interests of total honesty and transparency, we admit that there has been a significant number of vehicles sold where the outstanding finance has not been settled in full.”
He said the sale had raised around £1m. In truth, said Mr Grout Smith, the amount involved from vehicles sold in this way was between £2.37m and £3.29m.
Some prestige vehicles were disposed of in “some other way,” some vanishing without trace, the court heard.
The trial continues.
First published at 11:25, Wednesday, 14 March 2012
Published by http://www.newsandstar.co.uk
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