A letting agent serving two years in jail after cheating landlords, tenants and two suppliers out of almost £150,000 behaved like a “gormless fool”.
Jeffrey Hoslett ran Cotswold Residential Lettings in Stroud. He admitted fraud over a five-year period between April 2007 and April 2012.
Most of the 33 victims were landlords who did not get the rent money they were due. Others were tenants whose deposits were lost.
There was also a plumber and a printer who went unpaid for work they had done.
Gloucester Crown Court heard that after the sale of his house, Hoslett had assets of only £19,569. Recorder Michael de Navarro QC made an order under the Proceeds of Crime Act confiscating the money.
It means that the victims will get back less than 14p in the pound of what they lost.
Stephen Thomas, defending, said that Hoslett stole the money to try to keep his business afloat. He had owed the taxman £20,000 and out of desperation paid with clients’ money.
Mr Thomas said: “He should of course have closed the business straightaway but he was very naive in relation to business matters.
“He did not recover from paying that tax bill. He did not seek any financial advice and he was effectively from then on robbing Peter to pay Paul.
“Of course he had respect for the previous owner, who he said was like a mother to him. She said the company was worth £65,000 to £70,000 and he raised finance when she sold it to him. He took no advice and didn’t really know that it was a failing business.
“He has he has been an absolute fool – in his own words totally gormless – in doing what he did.”
According to the Cotswold Residential Lettings website, the firm was founded in 1994. The website, which displays only a Guild of Lettings & Management logo, does not say which tenancy deposit scheme was used.
We have been asked to point out that the firm has absolutely no connection with another firm, COTSWOLD LETTINGS and sales.
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Comments
Word fail me where a couple of comments below are concerned.
"Stole or used" - Taking client money is theft or fraud and saying you only "borrowed" it is no defence. If he took client money then closed the business and declared himself bankrupt he'd still have faced criminal charges.
Graham - can you describe any circumstances where you can "legitimately use clients money for purposes unconnected to the client" ? I can't think of any.
Client money belongs to the client. Landlords and tenants are NOT providing you with a source of interest free unsecured credit and you cannot treat their money in that manner. What part of that is so hard to understand?
Calling for compulsory CMP does not work. No insurance company would cover theft or fraud which is the case here. When you have CMP you have to be able to provide random bank reconciliations showing you have the money in your accounts to the insurer. In a case like this which carried on for years then the insurance would have lapsed a long time ago as no bank reconciliations could be provided. If fraudulent bank recs had been done then the insurer would have refused to pay up.
The better way is to close the insurance deposit schemes and switch everything to custodial.
Oh, and it would not hurt if local council trading standards departments took responsibility for the work they are supposed to do rather than waiting to pick up the pieces.
Another classic reason to introduce compulsory CMP!
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In response to "Stole or Used" the line is not drawn in time - it is drawn in intention.
Stealing involves the intention to permanently deprive the owner of their property, be it money or a physical item. As a business holding clients money can, in some circumstances, legitimately use that money for a number of reasons unconnected to the client whose money it is, providing the business has an intention to return it then it is not stealing or "Theft". If, on the other hand, the business uses that money for other reasons and has no intention, or perhaps more pertinently, no possible ability to repay it when it becomes due, then that is the line that is required for stealing or "Theft". h
Here is a confusion, can anyone please explain the difference between stealing and borrowing/ using client money?
Closing the business would have let him off the hook and he would become one of a multitude of business bankrupts rather than a crook.
Given that one can seemingly use far more client money without punishment it can't be the £150,000 that was the problem so it must be the amont of time that the cash is borrowed or used that is the determinant factor between borrowing and stealing. Somewhere between 1 month a 5 years there is a line where the same deed crosses from an easily dismissed faux pas to a crime, does anyone know where that line is?