Stephen Leonard Hinchliffe, John Doherty, Paul Francis Brady, and Robert Martin Leckie were sentenced today at the Central Criminal Court.
- Hinchliffe was sentenced to 5 years imprisonment on each count to run concurrently
- Doherty was sentenced to 5 years imprisonment on each count to run concurrently
- Brady was sentenced to 2 years imprisonment on each count to run concurrently
- Leckie was sentenced to 30 months imprisonment on each count to run concurrently
The case concerned the bribing of UMB bank officials to secure loans for the Facia Group (formerly Salisbury's Stores Ltd) which were used to purchase companies such as Freeman Hardy Willis, Sock Shop, and Red or Dead.
Hinchliffe was found guilty of 1 count of conspiracy to defraud and 10 counts of giving a corrupt gift (total value: £813,750)
Doherty pleaded guilty to 1 count of conspiracy to defraud and 14 counts of accepting a corrupt gift (6 with Leckie)
Brady was found guilty of 1 count of conspiracy to defraud and 3 counts of accepting a corrupt gift (total value: £151,000)
Leckie was found guilty of 6 counts of accepting a corrupt gift
Hinchliffe (51) of Sheffield, was chairman and chief executive of the Facia Group of companies.
Doherty (44) of Bishops Stortford, Herts was Chief Lending officer at United Mizrahi Bank (UMB) until August 1995. UMB is the UK subsidiary of the United Mizrahi Bank of Tel-Aviv, Israel.
Brady (43) of Bishops Stortford, Herts was Head of Trade Finance at UMB until July 1996.
Leckie (49) of S London assisted Doherty with the retention and distribution of the corrupt payments. He administered two limited companies that issued misleading invoices that were used as conduits for the money.
A corrupt relationship developed during 1994 between Hinchliffe and Doherty and Brady. Doherty and Brady were both members of the UMB credit committee whose role was to consider and authorise loans made by the bank in the UK. As a result of the payments Hinchliffe made, UMB lent companies he controlled in excess of £13 million. The loans were made without adequate security and contrary to UMB's lending guidelines. Using the loans from UMB, the companies controlled by Hinchliffe were able to buy groups of retail shops trading under the names of Salisburys, Sock Shop, Contessa Ladieswear, Oakland Menswear, Red or Dead, Torq Ltd., Manfield, Truform, Saxone and Freeman Hardy Willis. Altogether Mr Hinchliffe gained control of companies running 850 shops and employing 3000 people. By the end of August 1995 the total exposure of UMB to Mr Hinchliffe's companies was in excess of £8 million. By restructuring the debt, tightening its security and insisting on a rigorous schedule of repayments, UMB was able to recover all its money despite the fact that all the relevant Hinchliffe companies went into receivership in 1996.
- June 1996: Receivers appointed to the various companies in the Facia Group.
- December 1996: South Yorkshire Police referred the case to the SFO.
- 4 November 1998: Hinchliffe disqualified from acting as a director for 7 years by the High Court.
- 7 December 1998: the four defendants were charged.
- 31 May 2000: Doherty pleaded guilty to all counts on the indictment.
- 31 May 2000: Trial of Hinchliffe, Brady and Leckie started at Central Criminal Court.
- 25 January 2001: Jury at the Old Bailey found Hinchliffe, Brady and Leckie guilty of all counts.
Notes to editors:
- The investigation was supported by South Yorkshire Police.
- Counsel for the SFO were Timothy Langdale QC, Andrew Baillie.
- SFO case controller was Peter Kiernan.
- Jury retired on 15 December 2000, they deliberated for 75 hours 43 minutes.
- >HHJ Boal QC referred to the case as being `an example of how serious fraud cases should be investigated and presented to the court', he congratulated and commended everyone involved in its investigation and prosecution.
- A Contempt of Court order was made today prohibiting publicity of future proceedings linked to one of the defendants. For further information contact the SFO press office.
- Press office tel: 020 7239 7001/4 (out of hours mobile: 0781 807 6688)