Insolvency Service
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Fraudulent trading leads to jail and banning orders for brothers
Brothers Geoff and David Auston were sentenced to terms of 5 years and 18 months’ imprisonment, respectively, at Teeside Crown Court for fraudulent trading following an investigation by The Insolvency Service and prosecution by the Department for Business, Innovation and Skills. Geoff, 57 and David, 47 had both pleaded guilty with intent to defraud the creditors of Lima Transport Limited.
In addition, Geoff had pleaded guilty to fraudulent trading in relation to Bulkliner Limited and three offences of being concerned in the management of three companies whilst disqualified.
Geoff, a two time bankrupt, was disqualified for 13 years in 1996 for his part in the failure of Whittle Colliery in Northumberland. He was also imprisoned for money laundering offences in 2003. In 2005 – at a time when he was barred from ‘directly or indirectly’ being concerned in the management of any company, he bought a haulage company Lima Transport Limited (which had a commercial operator’s licence) – and ran it dishonestly, to the detriment of creditors until it was wound up in July 2006.
One such creditor was a businessman, who Geoff Auston – within weeks of his release from custody - had persuaded to invest in a joint venture transport company – Bulkliner Intermodal Limited. Once the joint venture company was well stocked with haulage vehicles, Geoff Auston used those same vehicles – and pilfered the trade – for his new company – Lima Transport Limited. He later set up a third company, cunningly named Bulkliner Limited – with the specific aim of confusing debtors into paying money – owed to Bulkliner Intermodal Limited - into this new company’s bank account. His plan worked, and money was diverted from the legitimate creditor into Auston’s hands.
Lima Transport also left fuel providers and vehicle loan companies high and dry, after Geoff had secured credit for Lima, and failed to pay the bills. As the debts of Lima were mounting, Geoff fleeced the company further by hiring vehicles for his personal use, including an Aston Martin DB9 Coupe, and by withdrawing hundreds of thousands of cash to fund his luxury lifestyle.
Throughout the demise of Lima Transport Ltd, David Auston was the named director of the company. Although a lesser player than his brother, he nevertheless connived in the fraudulent trading, in the full knowledge that his brother was an unfit and disqualified director.
Lima Transport Ltd was wound up compulsorily on 10 July 2006, leading to claims from creditors totalling over £2 million.
Bob Bussey, Investigation Officer at the Department for Business said:
“Geoff Auston is a rogue businessman who had been behind a string of failed companies over the years. The authorities have caught up with him and the sentence reflects the gravity of his dishonesty revealed during the course of these proceedings.”
In addition to the terms of imprisonment passed, Geoff Auston was further disqualified from acting as a director or being involved in the management of a company for 15 years. David Auston was disqualified for seven years.
Ends
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Notes to Editors
1. Geoffrey Auston lives in Bishop Middleham, Ferryhill, Co Durham. David Auston is late of West Cornforth, Ferryhill, but now resides in Billingham.
2. Geoffrey Auston and David Auston were sentenced on Friday 16 September for the following offences:
i) Fraudulent Trading contrary to section 458 of the Companies Act 1985
PARTICULARS OF OFFENCE
GEOFFREY AUSTON and David AUSTON between 10 April 2005 and 10
July 2006 were knowingly parties to the carrying on of the business of Lima
Transport Ltd with intent to defraud the creditors of the said company.
3. Geoffrey Auston: three years’ imprisonment; David Auston :18 months’ imprisonment.
ii) Fraudulent Trading contrary to section 458 of the Companies Act 1985
PARTICULARS OF OFFENCE
GEOFFREY AUSTON between 8th day of December 2005 and 13 February, 2007 was knowingly a party to the carrying on of the business of Bulkliner Limited with intent to defraud the creditors of the said company.
Geoffrey Auston : two years’ imprisonment (consecutive to the other fraudulent trading count)
iii) Being Concerned in the Management of a Company Whilst Disqualified
contrary to sections 6 and 13 of the Company Directors Disqualification Act 1986
PARTICULARS OF OFFENCE
GEOFFREY AUSTON between 10 April 2005 and 10 July 2006, being a person who on the 15th November 1996 at Newcastle County Court had been disqualified from being a director of a company or in any way whether directly or indirectly being concerned or taking part in the promotion, formation or management of a company for a period of 13 years was involved in the management of a company, namely Lima Transport Ltd without the leave of the court.
Geoffrey Auston : 15 months’ imprisonment (concurrent to other counts)
iv) Being Concerned in the Management of a Company Whilst Disqualified
contrary to sections 6 and 13 of the Company Directors Disqualification Act 1986
PARTICULARS OF OFFENCE
GEOFFREY AUSTON between 8 December 2005 and 13 February 2007, being a person who on the 15th November 1996 at Newcastle County Court had been disqualified from being a director of a company or in any way whether directly or indirectly being concerned or taking part in the promotion, formation or management of a company for a period of 13 years was involved in the management of a company, namely Bulkliner Ltd without the leave of the court.
Geoffrey Auston : 12 months’ imprisonment (concurrent to other offences)
v) Being Concerned in the Management of a Company Whilst Disqualified
contrary to sections 6 and 13 of the Company Directors Disqualification Act 1986
PARTICULARS OF OFFENCE
GEOFFREY AUSTON between 12 May 2006 and 13 February 2007, being a person who on the 15th November 1996 at Newcastle County Court had been disqualified from being a director of a company or in any way whether directly or indirectly being concerned or taking part in the promotion, formation or management of a company for a period of 13 years was involved in the management of a company, namely Bulkliner Logistics Ltd without the leave of the court.
Geoffrey Auston : 12 months’ imprisonment (concurrent to other offences)
4. In sentencing Geoffrey Auston to three years’ imprisonment for the Lima Transport count, HHJ Crowson told him that “creditors have lost significantly by your acts to satisfy your luxury lifestyle, including the Aston Martin.” While imposing the maximum period of disqualification on Geoffrey, he said “it is clear to me that I cannot ignore disqualification and deprive the wider public of protection. The facts demand that I impose a 15 year disqualification; no less a period is required.”
5. The prosecution arose after a complaint by the Official Receiver, Stockton on Tees (the liquidator of Lima Transport Limited) was forwarded to The Insolvency Service’s Criminal Authorisations Team. The matter was referred to the Department for Business, who carried out a full investigation.
6. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.bis.gov.uk/insolvency
6. Media Enquiries should be directed to:
Ade Daramy, Press Officer on 020 7596 6187
Contacts:
Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk
