Agent who failed to protect deposits banned from being director

A letting agent who failed to protect tenants’ deposits and owed landlords money, collapsing with debts of £410,000, has been disqualified as a director for eight years following an investigation by the Insolvency Services.

Daniel Richard Maurice McCarthy, director of Jupita, which traded as GDH Property Management Services in the Wirral, has given an undertaking to the Secretary of State for Business, Innovation and Skills which disqualifies him from managing or in any way controlling a company or being a director until 2020.

In giving the undertaking, McCarthy, formerly a student member of the NAEA, did not dispute that he paid himself £48,909 between November 2009 and July 2010. During this period creditors, including landlords who were owed at least £113,809, were not being paid. McCarthy also had tax arrears.

The company went into voluntary liquidation on July 21, 2010, with assets of £6,000 and liabilities of £416,879 – a deficiency of £410,879.

McCarthy did not dispute that he did not deal with tenants’ deposits in accordance with the Housing Act 2004. Instead, says the Insolvency Service, he used the money for the benefit of Jupita and to make payments to himself. As a result, tenants and/or their landlords have lost at least £35,990.

Landlords associated with the company have been made liable for the return of the deposits (and a fine of three times the deposit).

Commenting on the case, Claire Entwistle, director of Company Investigations North, said: “Directors who seek to use tenants’ and landlords’ monies, which should have been protected, particularly if used for their benefit, ahead of creditors, in insolvent companies, will be pursued rigorously by the Insolvency Service.

“The public should be assured that the Insolvency Service will seek to disqualify the directors of companies that do not obey the law and use other people’s money for personal gain.”

The NAEA held a disciplinary tribunal into McCarthy, finding five alleged breaches proven in 2011. McCarthy had denied all of them, but was fined £2,500. Afterwards the tribunal said it was ‘astounded’ by McCarthy’s ‘lack of consideration of the need to present evidence to the tribunal or the seriousness of the case against him’.