Insolvency Service crackdown on fraudulent activity

A Manchester software developer has been banned from being a Director for 12 years following an investigation by the Insolvency Service.

Adam Norton was the director of ANorton Holdings Limited, which provided virtual software and support to gyms and fitness clubs.

However, investigators found that the investments that Adam Norton had received to help develop a mobile application, amounting to £849,999, were paid into his personal bank account rather than the company’s.

He also provided false copies of bank statements to the investors, which incorrectly showed the bank account was held in the name of ANorton Holdings, rather than his own.

Norton accepted that he had provided incorrect bank details and false bank statements on three separate occasions to an investment company for the purposes of obtaining funds.

Speaking after the disqualification hearing, a spokesman for the Insolvency Service said that the ban “sends out a clear message that where a corporate vehicle is being used to facilitate actual or potentially fraudulent activity, we will not hesitate to use our powers to remove dishonest or reckless directors from the business environment.”

In another recent case investigated by the Insolvency Service, a restaurateur in Worthing, Shafique Uddin, was banned for eight years for filing inaccurate tax returns, which meant that his restaurant underdeclared and underpaid taxes in the region of £320,000.

The order means that for the duration of the ban Mr Uddin cannot either directly or indirectly become involved in the promotion, formation or management of a company, without the permission of the court.

As another spokesman for the Insolvency Service pointed out, “much of the public service is funded by the correct amount of taxes being paid and that’s what makes Shafique Uddin’s misconduct all the more serious.”

Commenting on these cases, Roger Isaacs, Forensic Partner at Milsted Langdon, said: “The Insolvency Service conducts a number of investigations each year resulting in action being taken against directors, resulting in penalties ranging from lengthy disqualifications to criminal convictions.

“Investigations are thorough and can be complex – often requiring the services of forensic accountants on both sides.

“In Adam Norton’s case, the reference to forged bank statements is interesting because their use is a feature of fraud that is becoming increasingly common, as paper statements are replaced with electronic ones that are relatively easy to doctor.”

Source(s): Gov.UK

Posted in The Forensic Blog.