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Insolvency Practitioner jailed for nine-year, £5m fraud 11 February 2016

Insolvency Practitioner Kiran Kumar Mistry has been sentenced to three and a half years’ imprisonment, for conspiracy to defraud involving nine companies between 1998 and 2007.

Mistry was sentenced on 28 January 2016, following an investigation by the Department of Business Innovation and Skills (BIS) under the name Operation Barber

The companies involved were Millistyle Ltd, Britannia (Construction Supplies) Ltd, Fabricat Ltd, Woodpro Ltd, Sharpe Developments Ltd, All Aspects Construction Ltd, RMD Imports Ltd, Bluechip Innovations Ltd, and Real Estate (Midlands) Ltd.

The investigation found and the court heard that Mistry, as the Insolvency Practitioner involved in 8 of the Operation Barber companies, had facilitated co-conspirator Demitris Bains in defrauding creditors for a considerable period of time.

Florenc Hoxha was found not guilty in relation to one count of fraudulent trading of the company Bluechip Innovations Ltd. A further defendant, David Wright, pleaded guilty to one count of fraudulent trading of the company Millstyle Limited. Wright was sentenced to 18 months’ imprisonment, suspended for two years with a community punishment order of 160 hours.

This was the second trial in relation to Operation Barber. The first involved eight defendants and concluded on 28 February 2014, with guilty verdicts against the defendants Eric Harris, Sukhi Samrai and Phillip Williams.

Ringleader Demitris Bains pleaded guilty to Conspiracy to Defraud while his sister, Kiran Dillon, pleaded guilty to the fraudulent trading of all nine companies.

His Honour Judge Pegden described the case as “a massive fraud of £5 million involving nine companies over a period of seven years”, which had undermined local business confidence and caused loss to small traders and businesses which were “repeatedly targeted by those involved”.

Bains, he said, carefully planned the fraud, controlled it and benefited with funds used for expensive cars, pensions and helicopter lessons.
Glenn Wicks, the BIS officer in charge of Operation Barber, said: “These people deliberately set out to defraud local builders and builders’ merchants who, in some cases, nearly lost their livelihoods. In January 2007 we worked with three police forces across Derbyshire, Leicestershire and Nottinghamshire with 140 staff executing 31 warrants. It was and still is the biggest operation of its time and it stopped these criminals dead in their tracks.”

“The insolvency regime relies entirely on the professionals within it being honest. Kiran Mistry was a qualified and licensed insolvency practitioner who has been proved to be corrupt and a shame to his profession. Rather than reporting criminality as he was legally bound to do, he was actually involved in committing the frauds and then covering them up.”

 

 

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