A fraudster who caused a Hartlepool firm to go out of business after it racked up over £250,000 in work it was never paid for has been jailed for four years.
Michael Smith, 38, duped Enviro-Build NE into carrying out cavity wall insulation on 43 homes in town which it believed was being funded through a government scheme to make households more energy efficient.
But Smith had forged a contract with a national provider of the home improvement works and Teesside Crown Court heard no funding was in place.
Enviro-Build NE later went into liquidation after being unable to pay creditors and nine people lost their jobs.
At the same time, Smith was also plundering the bank account of a company he helped to set up to carry out similar work by £43,000.
Prosecutor Ian West said: “The Crown say the fraud was sophisticated and there was significant planning.
The fraud was sophisticated and there was significant planningProsecutor Ian West
“It involved the forgery of a number of documents, principally a contract agreement, also emails and bank documents.
“The fraudulent activity was conducted over a sustained period of time from February to July 2014.”
The court heard how Smith had worked as a canvasser getting households to sign up to the energy saving scheme funded through the Department of Energy and Climate Change.
Operating under the name of Cozy Green Homes Ltd, Smith later signed a sales agreement with national firm the Mark Group to find them potential customers.
But he forged the document making it look like he was contracted by the company to actually carry out the work which he then sub-contracted to Enviro-Build.
It incurred costs totalling £260,000 which it was never paid for.
Mr West said it was not clear how Smith was to gain personally from the fraud directly.
During the same period Smith formed another company called Cosy Green Homes to take advantage of the government grants.
His partner in the company, Dean Fox, worked offshore and left Smith in overall charge.
But Mr Fox later discovered that Smith had used the company accounts to pay off Smith’s own personal debts totalling £41,050 and pay himself £2,765.
Around £22,500 went to Enviro-Build NE.
“He was effectively robbing Peter to pay Paul,” said Mr West.
Smith also pocketed £5,945 under the same government scheme after falsely claiming he lived at a house in Derby Street.
He admitted three counts of fraud and one of forgery.
Jim Withyman, mitigating, said: “It was never his intention when he first started this venture to cause them (Mr Ede and Mr Fox) loss and damage them in any way.
“He is genuinely remorseful for what happened.
“He was an incompetent businessman who acted dishonestly to try to keep a legitimate enterprise running.
“He is not a sophisticated fraudster who has made millions of pounds by ripping off members of the public.”
Letters from friends and family of Smith, of Arncliffe Gardens, Hartlepool, said his behaviour was out of character.
Jailing him, Recorder Simon Phillips QC said: “All that has been destroyed by the dishonesty you perpetrated in the first half of 2014 causing misery and difficulty not only for yourself and immediate family but for an extended number of individuals and corporate concerns.”
Smith was also disqualified from being a director of a business for 10 years.
A confiscation order for £3,776 was made towards a benefit figure of £49,760.
Detective Inspector Dave Turnbull, of Cleveland Police’s Economic Crime Unit, said: “I welcome the sentence handed out.
“This was a complicated investigation involving large scale fraud which led to the collapse of legitimate businesses, job losses for a number of people and a government department – the Department for Energy and Climate Change – being defrauded.
“Mr Smith was motivated by greed and he now faces a period in prison where he can reflect on the actions he chose to take and the impact his activity has had on individuals and businesses.”