A financial director who stole more than £600,000 from his firm and lived the high life while the company headed towards administration has been put behind bars.
John Forrest used company cash from his recycled food packaging firm Re-Pet at Houghton-le-Spring, which he founded with two business partners, to splash out on furniture, holidays, school fees and hotel stays.
The greatest betrayal was his trusted business partner was enjoying holidays, expensive hotels, and only worked school hours.Rupert Dodswell, prosecuting
Newcastle Crown Court heard today that as his fellow directors worked hard to make the business a success, Forrest was siphoning away money to keep for himself.
On top of taking £646,996 from the business, Forrest fraudulently claimed more than £350,000 in VAT from the taxpayer for the firm.
The company has now gone into administration, which the future of employees and directors in jeopardy.
Forrest, of Hawthorn Road, Gosforth, Newcastle, admitted theft and fraud charges, and has been jailed for three years and eight months.
The 48-year-old has been banned from being a company director for 10 years.
Judge Robert Adams told him: “On the company credit card there were over 100 payments (worth £163,895) clearly identified as being for your own benefit for legal bills, school fees, holidays, various fixtures bought by you.
“That reflects the blatant personal gain.
“The loss to the business in total is £646,996. The business has gone into administration with the obvious effect on other directors and empoyees.
“You have benefited by the way of holidays, children’s school fees being paid which you otherwise could not afford and you placed the needs of your family and yourself over your duties as a director to shareholders.”
Prosecutor Rupert Dodswell told the court Forrest and his two partners, who were old friends and colleagues, set up the business in 2010 at an industrial estate in Houghton.
All three made vast personal investment in the company.
They secured investment from two other firms, who became shareholders in the company, which was initially a success.
Forrest’s fraud started to unravel when the company received a visit from a Customs officer in relation to the VAT fraud in late 2012, which spared an investigation into the firm’s finances as a whole.
When the enormous irregularities were found, Forrest was suspended and later dismissed from his role as financial director.
Inquiries revealed Forrest had transferred huge sums of cash from the company bank account to accounts held by his other businesses and had sent some to his own personal account.
He has spent over £163,000 on company cards and cheque books.
In a victim impact statement, a fellow director in the firm said the business has been loft “mortally wounded” by Forrest.
The director said he has been threatened with violence by an unpaid creditor, and that his long-standing working relationships have been affected.
He said his “heart and soul”, along with long, hard hours which cost him precious family time, went in to trying to make the company a success.
Mr Dodswell added: “The greatest betrayal was his trusted business partner was enjoying holidays, expensive hotels, and only worked school hours.”
Jonathan Devlin, defending, said Forrest is of previous positive good character, and stands to be punished further under the Proceeds of Crime Act, where his assets will be taken away.
Mr Devlin added: “This will be his first experience of a custodial setting.
“The court can be assured that he is at low risk of re-offending. He will not re-offend.”