‘Selfish and greedy’ boss jailed for £7.5 million fraud

The ‘selfish and greedy’ boss of a Warwickshire-based company ran what a judge described as a ‘fraud factory’ where customers were duped out of money on an industrial scale.

Crooked Andrew Harris intended to defraud people out of a staggering £7.5million by fraudulently selling ‘fractional ownership’ of three yachts and ongoing maintenance agreements.

He and David Evans, his fellow director in Shakespeare Classic Line, based at the Nunhold Business Centre in Hatton, near Warwick, had denied a charge of fraudulent trading.

But Harris (54) of Henley Road, Alcester; Evans (68) of Longdon Road, Shrewsbury; and the company were all convicted after a nine-week trial at Warwick Crown Court in June.

Following an adjournment for reports to be prepared Harris, who was also convicted of ten offences of using unfair commercial practices, was jailed for four-and-a-half years.

Evans, who was convicted of five of those further offences, was given a 21-month sentence suspended for two years and was ordered to do 250 hours of unpaid work.

The judge also disqualified Harris from being a director of a company for five years and Evans for two years.

Sentencing the two men, Judge Parker said: “Mr Harris ran what can only be described as a fraud factory in Hatton, where customers were processed in industrial numbers.

“I am satisfied Mr Harris is a dishonest, selfish and greedy man, and I am satisfied he used Mr Evans in the way he used other people.

“The jury were satisfied Mr Evans’s role was limited, although limited to some very serious conduct indeed. He did what he did because he felt he had no choice, no choice if he wished to retain his cherished title of director.”

Because it is facing a financial penalty, the company itself cannot be sentenced until a confiscation hearing under the Proceeds of Crime Act takes place in June next year.

Prosecutor Tony Watkin said the fraud involved the sale of ‘fractional ownership’ in three £250,000 yachts moored at Marmaris in Turkey.

Potential customers were enticed to attend sales presentations at Shakespeare Classic Line’s premises in Hatton through cold calls and the offer of free holidays and the like.

But once they were there, they were subjected to ‘a carefully-honed high-pressure sales pitch’ for up to five hours in a bid to get them to sign up.

The relentless pressure, sometimes involving up to four sales staff dealing with one couple, was designed to wear them down and to get them to commit themselves on the spot.

The company also went out of its way to avoid giving customers a cooling-off period, and they were not allowed to take paperwork away to study it at their leisure before signing.

Customers ended up agreeing to pay £10,000 or more for one-week ‘fractional ownership’ of a berth on one of the yachts.

In addition they had to agree to pay £250 per person to actually stay on the yacht, plus an annual maintenance cost of £395 initially - but increasing by up to 10 percent a year.

One duped customer described his experience at Hatton as leaving him ‘addled, stressed and brainwashed.’

A 72-year-old said it has caused him to feel ashamed at losing everything he and his wife had worked for all their married lives, adding: “They have stolen our future.”

And one woman described how their fear of losing their home led to her husband becoming depressed and speaking of suicide being the only way out of the mess they were in.

Another couple said their relationship almost broke down completely, which also affected their son, because of the stress and blaming each-other for signing the agreement.

Judge Parker said although it was ‘simplistic’ to assess the gravity of the offence by just looking at figures, the total number of fractional ownerships on offer was 612 – based on four berths on three yachts for 51 weeks a year.

“The average was £10,000 a share, so the projected total of the fraud, if all had been sold, would have been in the region of £6million.

“But it did not end there, because they were also contracted to pay maintenance fees which could rise by ten per cent a year for 25 years, and the probable value of that was £1,386,172.

“That puts the intended value of the fraud to be just short of seven-and-a-half million pounds; and the amount paid by the 292 owners there were was just over £3million.

“The overwhelming evidence is that so far as the sale of yacht fractions was concerned, Mr Harris was trading fraudulently throughout.

“The jury’s verdicts manifested what had become evident, that there was a difference in the culpability of Mr Harris on the one hand and Mr Evans on the other.

“I am satisfied that Mr Evans knew of those practices and did nothing to stop them. I am satisfied the jury’s verdicts are consistent with him having, for a large part, a passive role rather than any controlling role.

“But Mr Harris’s case and the company’s case were indistinguishable. Mr Harris has been the sole driving force behind the limited company. He identified Mr Evans as someone who was likely to do his bidding.

“The fact that timeshares became tainted in the minds of the public was one reason why Mr Harris was spurred to adopt the practice of fractional ownership which in theory gave the purchaser a fractional share in the profit of the product.

“This was, in my assessment, a form of timeshare ownership by another name, the least advantageous form imaginable; and there was another factor in that those fractional ownerships did not give any right to cancel.”

Every customer asked whether it was timeshare, and was told it was not, which Judge Parker said was ‘a calculated lie’ and they were deceived into attending presentations.

“They were all subjected to the same unremitting, aggressive and untruthful sales techniques Mr Harris had devised and a complex and confusing process.

“The fact that most were professional people or skilled workers and were deceived shows how successful that was. They were told the purchase of the fraction was profit-making or self-financing, and many signed documents which were superficially legally binding.

“It is clear to me that the entire purpose of the whole enterprise was to obtain signatures to documents which the company could then seek to enforce through threats of civil action through the courts.”

He commented that it was significant that once the law changed to give a cooling-off period for fractional ownership, the company never offered to sell one again.