The payment was made to a limited company of which he is the director.
The paper he signed stating the transfer of the materials was signed by him as director of the limted company (clearly stated underneath his signature).
I do understand that all he has done was in his role of director of the company and the responsability lies with the company but I thought that if we could prove fraudolent behaviour then this would become a criminal offence and he would have to respond of this personally.
The amount paid towards materials is approx £13,000.
We have all the documentation to prove what I am saying including:
- email from him stating that he needs the money to purchase the material
- his signature (albeit as director of the limited company) on the document stating the transfer of ownership of materials.
- precise evaluation carried out by our project manager which clearly state that the money was given towards purchasing the materials.
Finally, some of the payments where made as early as May 2013 and we found out that he had not purchased anything in August 2013, I believe he is entering in liquidation only now (Oct 2013).
Whether this is fraud or not would really depend on whether thedirector of the company with who you arranged this new that the company wasgoing down the tubes at the time he asked you for the money. If that was thecase, this is certainly fraud or obtaining money by deception.
It would also depend whether the director shortly after you paidthe money gave himself a big fat bonus or wages or paid all his personal billsor suchlike.
The first thing I would do is get as much information as possibleincluding accurate dates bank statements etc and I would go to the police. Itis debatable whether the police will simply say that this is a civil matter butfrom the facts that you have given me, I think that the director has probablybeen acting fraudulently.
If the police are not interested (I would speak to a seniorpolice officer) then you would be as well to speak to a solicitor who shouldwrite to the director telling him that you are going to hold him personallyresponsible and that you want the money back. If he is a director of a limitedcompany which is really just him hiding behind the shield of a limited company,then it is possible to sue him personally.
The solicitor can also threaten an application to court forpre-action disclosure of the bank statements of the limited company to seeexactly what happened to the money and whether he has indeed paid himself a bigfat bonus out of your money before going down the tubes.
I had a potential client (who I never actually asked for) whopaid herself £18,000 bonus before putting the company into liquidation a fortnightlater owing HMRC £20,000. By the time the revenue chased her, the money was spent.The liquidator asked for the money back which was not forthcoming andultimately, she was made bankrupt.
This guy is potentially in exactly the same position as my potentialclient was.
Do remember that if the director of the company is a man of strawwith no assets and no house etc then litigation may well be fruitless.
I am pretty sure he was already in very bad financial conditions at the time he asked for the money (in fact, right at the start of the project).
This statement is based on the following:
1. In a meeting at his office I have seen unpaid bills (not sure is these were company bills or personal) which were clearly "final reminders" of him needing to pay.
2. I have later found out that at least two of the builders working for him had not been paid, and I also heard that he owed money to various suppliers. However, I have no evidence for this.
3. After one of our payments in went "on holiday" in Cornwall, for a week during a May bank holiday, if I remember correctly.
I have no factual evidence for 1-2-3 but if an investigation was made which looked at the company and his own bank accounts, I believe it would be very easy to find evidence for this.
We have reported this to "Action Fraud" and have a crime reference number, but I don't know if this will be followed on. I have only completed the form online. I have mentioned the evidence that I have but I have not been able to upload any of this.
With regards XXXXX XXXXX assetts, he has a car and I assume he has a house, weather these are under his name or at somebodyelse's name (say, his wife's), I am not sure.
One thing is getting the money back, which I don't know if we ever will. But one other important aspect for us is making sure he does not walk off from this completely unpunished and able to do the same to other people... I would be happy with his criminal record being affected
I would certainly go to the police with this as I mentionedearlier.
If you know his address, you can get a copy of the land registrydeeds for just 3 pounds here https://eservices.landregistry.gov.uk/www/wps/portal/!ut/p/b1/04_SjzS0tDQwMTIxMjLXj9CPykssy0xPLMnMz0vMAfGjzOKNjSxMDA1NjDwsjM3MDTxN3dyNDUNMjQ1MjPWDU_P0c6McFQH3SLFU/
section C, the charges register will show if he has a mortgageand also if there are any second charges or charging orders or bankruptcyorders.
Section A the proprietorship register will show who owns theproperty. It would be worthwhile spending the 3 pounds to get that information.
You can get very basic information on the company here http://wck2.companieshouse.gov.uk/wcframe?name=accessCompanyInfo
and see whether it has been late filing accounts and whether ithas been liquidated or there is a proposal to strike off.
Can I answer any further questions for you?
Do you have any other advice on what else we should do apart from going to the police?
we had a preliminary meeting with a solicitor who was of the opinion that because the builder was acting as director of a limited company, it would be very difficult to prove fraudolent behaviour. His opinion was that it would be virtually impossible to win a court case.
If you take this to court yourself, you are going to need thecourt's permission to sue the director personally although there is no reasonwhy you cannot issue proceedings against the limited company and the directorpersonally and let the judge decide whether he will allow the claim against thedirector.
I think this is one where it would be worthwhile doing a littlebit of research and bringing the litigation yourself rather than paying £200per hour for a solicitor.
The process is not difficult if you simply follow it step by stepit is just because of the amount involved there is a bit more paperwork thanthere is in the Small Claims Court.
If however the builder declares himself bankrupt your onlyrecourse is the police.
Thanks this is all extremely useful.
sorry to bother you again, but just a couple more clarifications:
1. If we were to take him to court ourselves, where would we have to start? where can we find information on the procedure.
2. I am unsure if "bankruptcy" and liquidation are the same thing or if the first relates to the builder as an individual and the second to the company. As I said, we understand that the company is undergoing liquidation, however, we are not aware of the builder declaring personal bankruptcy.
There is no worry asking anything else, it is no bother at all.
You can keep posting questions on here and if you sign up for asubscription which you pay monthly, (I don't know how it works but I know it isavailable) you can ask unlimited questions for the one monthly fee. If youemail the site, they will send you details.
You can actually issue proceedings not just in the Small ClaimsCourt but in any court online here www.moneyclaim.gov.uk
and then simply follow the process. As each stage progresses, ifyou have a query simply post a question.
The first thing that you need to get round of course is gettingthe court to agree that the director is culpable as well is the limitedcompany. There is no point in pursuing the limited company if the limitedcompany has gone bust.
To prove the director is culpable, you are going to need detailsof where your money went and in that respect, the first thing you may need isan application to court (form N244, cost £175) for an order for pre-actiondisclosure of the bank accounts showing the paper Trail for the money you paid.
Once you have that, you will have an idea whether you simply spiritedyour money away.
Just because the police are not interested in bringing a criminalfraud claim does not mean that you cannot bring a civil claim on the samegrounds against him personally
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