Director Guilty of False Accounting and Fraud
A London finance company has been defrauded by two executives working for a healthcare services company of over £1.2 million.
James Frauts, who is Managing Director of Insight (1997) Ltd. And Christopher Lynch, who is the administration manager of the company pleaded guilty to defraud, fraudulent trading and false accounting from May 2002 to July 2004 in earlier hearings at the Manchester Crown Court.
Insight was a specialist healthcare provider based in Manchester. It treats young people and adults who suffer from Autism Spectrum Disorder (ASD). Insight had been paid for by 5 local authorities in the north-west of England.
By the year 2004, Insight had grown substantially as a business. It had reportedly 13 care homes with an annual turnover of around £3 million. It employed 150 staff.
Resource Partners is a finance company which was used to make payments to Insight. Resource Partners had business which was involved in providing funds to companies which undertook private healthcare. It specialized in making immediate payments to them on their invoices on the local authorities on the care work they provided.
Resource Partners would then wait for the local authorities to make the payments based on their invoices. They made their money by charging a fee to Insight for this service.
When a Serious Fraud Office (SFO) investigation was conducted on Insight, it was found that the fraud started around the year 2002. This was when Resource was deceived repeatedly by Frauts and Lynch by sending invoices in the names of people whom it had stopped caring for. It even sent invoices of non-existent patients in their care homes.
The court found more than 170 false invoices generated that related to 12 individuals.
Insight collapsed due to cash problems and Resource Partners had paid over £1.2m on false invoices.