Three businessmen who defrauded suppliers and clients who hired cars from their luxury car rental businesses were given prison sentences amounting to almost seven years at Luton Crown Court today.
Each had been charged on four counts of fraudulent trading and were sentenced to imprisonment terms as follows:
- Gary Robert Massingham (33), was sentenced to 2 years 3 months on each count to run concurrently
- Anthony ("Tony") John Massingham (54), was sentenced to 1 year 9 months on each count to run concurrently
- Mark John Roe (32), in his absence, was sentenced to 2 years 3 months on each count to run concurrently. (He was also sentenced to an additional 6 months to run consecutive to the other sentence imposed for an unconnected fraud committed in Manchester in 1997 and prosecuted by the CPS)
All three were also disqualified from acting as a director until 2007.
All three had admitted their guilt before the court on 4 September.
Outline
The defendants operated luxury car rental businesses that grossed almost £1 million during the period under investigation. However they set about trading fraudulently. They used four different trading names and adopted other confusing and delaying practices in order to obscure their actions. Creditors were unpaid and customers were duped out of their deposits by false claims that they had caused damage to the cars.
Background
The three defendants went into the prestige car rental business. Using money from a recently failed venture, they set up four trading companies; Marque One Rentals Ltd, Marque One UK Franchising plc, Elite Rentals Ltd and Performance Car Share Ltd. They were ostensibly created for the purpose of starting a hire car business based in Hertfordshire. The businesses acquired a range of high performance or luxury cars for hire to the public. The reality was much different. The set-up was simply a vehicle for fraud through the dishonest extraction of assets or money from suppliers and from customers.
Suppliers of goods and services were not paid. Many cheques were returned unpaid because of insufficient funds or were "stopped". The deficiencies as regards creditors in relation to two of the above companies (Marque One Rentals Ltd and Marque One UK Franchising Plc) were about £300,000. Some of the cars have not been recovered.
The business was run with a total disregard to the promises they made to their customers. Cash was acquired by obtaining large deposits as part of the hire agreements. These were invariably never returned. A typical example of why the defendants refused to return deposits to clients was that they would fabricate a claim that an inspection of the vehicle after its return showed sufficient damage to warrant retention of the deposited money. An example of this was exposed by the BBC "Watchdog" programme in 1996 (see notes for editors).
Additionally bookings were taken for cars (to get the deposits in advance) whether or not there was any realistic prospect of being able to supply the required car. Last-minute substitutions were routinely offered. Regardless of whether the substitute car was accepted or not, deposits were not refunded.
The heart of the dishonesty lay in the cynical system of obfuscation put in place to prevent customers from obtaining their deposits back. This involved the defendants in creating a number of trading names, numerous accommodation addresses, and mail and telephone redirections to frustrate even the most durable complainant. Pre-prepared "fobbing-off" statements were inserted into letters to disgruntled customers. Business stationery did not contain the information required by the Business Names Act (1985).
Sometimes, false names were used when dealing with clients. Roe in particular (a one-time professional golfer) used golfing names such as Mark James or Steve Ryder. The other defendants also used false names. They told complaining customers that there was a separate complaints and legal department. Tony Massingham passed himself as a legal executive named Robert Conroy Associates. There would be four telephones on a desk, one for each of the businesses. Pinned on the office wall were notes, as a reminder, indicating which false names should be used for each of the telephones when talking to clients.
No proper books of account were kept and substantial amounts of cash were withdrawn from the business. £260,000 could not be properly accounted for. It is the SFO's assertion that this was used for the defendant's personal benefit.
Notes for editors
- Complaints about the various business activities of the defendants were initially investigated by Thames Valley Police and referred to the SFO in May 1996.
- The crooked practices of the car hire business also came to the attention of BBC Television's "Watchdog" programme in or around August 1996 after a complaint from a viewer. "Watchdog" undertook an undercover operation. Posing as a customer one of the "Watchdog" team entered into an agreement to hire a Lotus Elite car. A deposit of £1,000 was paid in cash. On the 20th August the Lotus was delivered to the "customer" and parked by the delivery driver in a garage. The RAC were then called and they did an independent check for damage. The Lotus was placed on a trailer and taken to a test centre and put on a rolling road. They clocked 30 miles. It was then returned on trailer and similarly parked in a garage. An employee of the hire business collected the Lotus at the appointed time. The "customer" was told to expect the return of the deposit in ten days. However, repeated attempts by phone and by letter to recover the deposit were frustrated. The defendants claimed the Lotus had been damaged. Even when "Watchdog" revealed their hand and told the car hire company that they were from the BBC and that the Lotus had been independently checked, their deposit was not returned.
- Roe did not appear in court for sentencing. Therefore the Judge issued a warrant for his arrest.
- Press office: David Jones 020 7239 7001 Mobile 0781 807 6688
