'Greedy' businessmen jailed over sophisticated £1.2million scam

Neil Dunningham ran his own successful business, Dunningham Decorators. Pic: Google Maps.
Neil Dunningham ran his own successful business, Dunningham Decorators. Pic: Google Maps.

Two "greedy" businessmen who staged a £1.2million building company fraud have been put behind bars.

Quantity surveyor David Ager and contractor Neil Dunningham ran a sophisticated scam to pocket cash out of seemingly legitimate transactions through civil engineering firm Sir Robert McAlpine.

Neil Dunningham paid for British Airways flights for David Ager to the tune of 9,062.

Neil Dunningham paid for British Airways flights for David Ager to the tune of 9,062.

Ager paid off his mortgage with the proceeds and bought a series of luxury cars, including a Jaguar, Range Rover and an Audi A6.

Dunningham, who runs firms including the successful Dunningham Decorators Ltd, and employs more than 80 staff, had hundreds of thousands of pounds in stolen cash passing through his personal accounts, but never spent a penny of it.

At Newcastle Crown Court today, Ager, 34, who personally pocketed more than £800,000, has been jailed for three years, while Dunningham, 47, who made over £600,000, for two and a half years.

Judge Stephen Earl said: "It is obvious both defendants were motivated by greed and they committed this simply because the opportunity presented itself.

A payment scam was used in relation to works at Glasgow Royal Infirmary. Pic: Google Maps.

A payment scam was used in relation to works at Glasgow Royal Infirmary. Pic: Google Maps.

"Each defendant has said the scam was the idea of the other first. Frankly, I cannot discern the truth. Both entered into the scam and both bear equal culpability in the round."

The judge said Ager has experienced an "epiphany" since his dishonesty was discovered, has shown "extraordinary remorse" and has actively sought to deter others in the trade from making the same mistake.

Judge Earl said Dunningham has tried to "deflect blame" for his actions, but is a successful businessman who has "spent none of the money".

Prosecutor Susan Hirst told the court the total figure involved in the offences, which spanned two and a half years, was £1,277,014.

The court heard Ager was earning £38,000 a year and had been with the building company since 2004, where he was permitted to provide one of the two approvals needed to make payments to contractors and subcontractors, such as Dunningham.

The court heard Dunningham, who was director and shareholder of companies including Dunningham Decorators Ltd and Clovely Care Ltd, had carried out legitimate contracts for Sir Robert McAlpine through his businesses, and the men got to know each other through their work.

Miss Hirst said a common practice in the building trade was for contractors to be paid indirectly, through other firms, who would deduct a handling charge.

One of the offences involved a company awarded a contract by Sir Robert McAlpine in 2012.

A payment certificate for £429,843 was authorised by Ager, who contacted the firm and asked them to receive and transfer funds to another contractor who could not be paid directly.

A payment of £200,000 was paid to the firm, to then be transferred to Dunningham’s company Clovely Ltd.

Miss Hirst said: “Clovely Ltd has never been used as a contractor by Sir Robert McAlpine, and so this payment was entirely fraudulent.”

Dunningham collected a cheque from the innocent firm in the sum of £201,435 and paid it into the Clovely Ltd account, and then into his own personal building society account.

Miss Hirst said: “A week later he paid for British Airways flights for David Ager in the sum of £9,062.

“He also paid off the finance on Ager’s Audi motor vehicle to the value of £22,706, and he paid £50,000 off David Ager’s mortgage.

“A further £5,000 was withdrawn in cash from his account.”

When police later searched Ager’s house they found a bank statement which had a calculation on the back showing both men were to receive a 50/50 share of the £200,000 from the fraudulent transaction.

Ager also arranged for Dunningham Decorators to be overpaid by £54,000 for some work they had done, which ended up in Dunningham’s personal account.

Another overpayment was arranged after Dunningham was given a contract by Sir Robert McAlpine to do decorating at West Lane Hospital, in Middlesbrough.

The investigation showed a payment of £140,874 was made to Dunningham Decorators for work at the hospital, which had not even been done.

A similar scam was used in relation to works at Glasgow Royal Infirmary.

In another offence, Ager provided information to Sir Robert McAlpine claiming £475,147 was owed to a building services firm.

Miss Hirst said: “This figure was almost four times greater than the true amount owed to the company.”

In November 2014 the payment was received into the other firm’s account and an email was sent by Ager to the company purporting to show a third party was owed £354,618.

The third party turned out to be a fictitious firm, linked directly to Ager's bank account.

When the building services firm began to transfer the £354,618 to Ager’s account, the fraud began to unravel after the bank became suspicious about transactions and alerted the police.

Miss Hirst added: “During the period of these offences David Ager had paid off his mortgage - a sum of nearly £130,000.

“In addition to his salary of £38,000, his wife was also employed and she had a salary of approximately £30,000.

“Officers had attended his home address and described the house as lavish.

“The Audi A6 for which Dunningham had paid off the finance had subsequently been traded in and Mr Ager had purchased a Jaguar XF, which costs in the region of £46,000. He also owned a Range Rover at the same time.”

Ager, of Parkside, Spennymoor, County Durham, pleaded guilty to 10 offences of entering into a money laundering arrangement, and Dunningham, of Sunderland Road, Sunderland, admitted seven of the charges.

Julie Clemitson, for Ager, said he had committed himself to educating others about the dangers of such offences occurring in the building industry since his arrest.

Miss Clemitson added: “This is a multi-million pound business where these sums are not missed.”

She added: “David Ager has demonstrated extraordinary candour and remorse in these proceedings.

“He has visited various companies in the industry, highlighting those areas that might be susceptible and discouraging people from being greedy like he was.

“To be going about warning of the dangers of his own behaviour is an extraordinary thing to do. He is a man of decency and integrity.”

Dunningham’s barrister said he was a successful businessman whose motivation “was not pure greed”.

He said Ager and his employers were a source of a significant amount of work and he went along with the scam to avoid risking losing the work.

A large number of references spoke of a good side to Dunningham.

The court heard prosecutors have commenced proceedings against both men under the Proceeds of Crime Act.

A spokesman for Sir Robert McAlpine said after the case: "We are pleased that this issue has come to an end with the sentencing of David Ager and Neil Dunningham.

"It is important to stress that our clients and projects have not been impacted by this crime in any way whatsoever, and we are working with the Crown Prosecution Service to recover the financial loss the company has suffered."