An insolvency practitioner has been jailed for three years and six months for conspiracy to defraud after a 10-year investigation.
A jury at Southwark Crown Court found Kiran Kumar Mistry, from Leicester, guilty of conspiracy to defraud nine companies after an investigation by officers from the Department of Business Innovation and Skills (BIS) under the name Operation Barber, the Insolvency Service said.
The fraudulent activity was between November 1998 until July 2007.
The investigation found and the court heard that Mistry, who was involved in eight of the Operation Barber companies, facilitated the fraud, enabling his co-conspirator, Demitris Bains, to continue to defraud creditors unchecked for a considerable period of time.
Florenc Hoxha, was found not guilty in relation to one count of fraudulent trading of the company Bluechip Innovations. Another defendant, David Wright, pleaded guilty to one count of fraudulent trading of the company Millstyle.
Judge Pegden said that the case involved a £5m fraud involving nine companies over a period of seven years which had “undermined local business confidence and had caused loss to small traders and businesses which were repeatedly targeted by those involved”.
He said that Bains had carefully planned the fraud, controlled it and benefited with funds used for expensive cars, pensions and helicopter lessons.
The fraud involved Bains making loans to the companies involved from various sources some abroad with “punitive rates” of interest in default which allowed him financial control and enabled him to fold the respective companies when it suited him.
Glenn Wicks, the officer in charge of the BIS investigation, said: “These people deliberately set out to defraud local builders and builders’ merchants who, in some cases, nearly lost their livelihoods. In January 2007 we worked with three police forces across Derbyshire, Leicestershire and Nottinghamshire with 140 staff executing 31 warrants. It was and still is the biggest operation of its time.”
Mistry and Wright were sentenced on 28 January.
Wright was sentenced to 18 months’ imprisonment, suspended for two years with a community punishment order of 160 hours for conspiracy to defraud involving nine companies.
