Insolvency Service slams brakes on near-£1m dealership scam

29-09-2017

The director of a car dealership in Bangor has been disqualified for 10 years after scamming members of the public out of nearly £1 million.

Gwyn Merion Roberts’ company – Menai Vehicle Solutions Limited – took money from customers but then failed to provide the vehicles that had been paid for. It also failed to pay customers for vehicles sold on their behalf, said the Insolvency Service today.

The dealership, which was formed in 2008 and operated from premises at Intec Parc Menai, Bangor, went into liquidation on October 21, 2015 owing at least £1.25m to customers and other creditors.

An investigation by the service concluded that Menai sold new vehicles to members of the public for less than it cost to buy them from dealers. This encouraged new custom but led to Menai becoming unable to meet its liabilities, resulting in new customer deposits being used to finance the purchase of vehicles for older customers.

Insolvency Service slams brakes on near-£1m dealership scam

The business model was unsustainable, said the service, and Menai either failed to provide vehicles to customers after taking payment for them or failed to forward funds to customers after selling vehicles on their behalf, resulting in losses to at least 40 members of the public totalling at least £969,011.

In several cases, 48-year-old Roberts provided banking documents to customers, showing payments had been instructed to car dealers for the purchase of the vehicle they had ordered, only to subsequently revoke the instruction.

The disqualification order means that without specific permission of a court, Roberts cannot act as a director of a company, take part – directly or indirectly – in the promotion, formation or management of a company or limited liability partnership, or be a receiver of a company’s property for 10 years, effective from September 5, 2017.

Commenting on the disqualification, Robert Clarke, chief investigator at the Insolvency Service, said: ‘This is an unfortunate case in which members of the public suffered significant losses as a consequence of the inexcusable financial practices adopted by Mr Roberts.

‘The lengthy period of disqualification is testament to how seriously the Insolvency Service views this misconduct. The Insolvency Service will not hesitate to act where members of the public have lost out as a result of malpractice leading to insolvency.’

Source: http://cardealermagazine.co.uk/publish/insolvency-service-slams-brakes-dealership-scam/139752