Fraudsters charged councils £1.2 million over non-existent clients
TWO men have been convicted after trying to con Bury Council by sending it care bills for people that did not exist.
James Frauts and Christopher Lynch ran a Salford firm called Insight, which helped the council look after people with autism.
Insight was paid by a company called Resource Partners PLC, which was in turn paid by the council at a later date.
Desperate for cash as Insight collapsed, Frauts, aged 62, and Lynch, aged 59, sent invoices to Resource to pay for care given on behalf of Bury Council to phantom patients.
It also sent invoices to patients that were no longer on Bury Council’s books.
But Bury Council was not the only victim.
Frauts and Lynch pulled the same stunt with Stockport, Rochdale and Warrington borough councils and Lancashire County Council.
In all, Insight submitted more than 170 false invoices relating to 12 people. Resource wrongly paid Insight more than £1.2 million.
Insight eventually folded, and fraud allegations about the company were reported to Greater Manchester Police, which referred the issue to the Serious Fraud Office in October 2005.
Frauts, of Todmorden, was charged in December after being extradited from Ontario, Canada.
He pleaded guilty to one count of fraudulent trading, 12 counts of false accounting and one count of conspiracy to defraud.
Lynch, of Offerton, Stockport, was charged in March this year and, after a two-week trial at Manchester Crown Court, he was convicted on Monday of conspiracy to defraud.
The defendants are to be sentenced on December 3.
Afterwards, the Crown Prosecution Service will investigate whether a proceeds of crime hearing can take place to help Resource and the councils affected recover some of their lost cash.
A Bury Council spokesman said: “We are pleased to see that these individuals have been brought to justice as they committed a serious crime.”
He added that the council did not believe any of the £1.2 million lost had been passed on to the taxpayer or lost to the council’s social care budget.
Resource was taken over by a new company in 2007.
A spokesman declined an opportunity to comment.