The three directors in the failed Trade Price Group hot tub business are facing jail after being convicted of fraudulent trading.
They used the firm, also called ‘Spaserve’, as a “cash cow” to rake in advance payments and deposits.
Principal shareholder Simon Foster, together with Stuart Cox, a partner in the business and office manager Johnathan Husselbee were all found guilty by a jury at Stafford Crown Court following a three-month trial.
Foster, aged 48, of Sandfield Meadow, Lichfield; Cox, aged 49, of Oak Way, Sutton Coldfield and Husselbee, aged 36, of High Street, Dosthill, Tamworth had all denied the charges.
Judge Amjad Nawaz remanded them on bail for reports, but warned them they each face a custodial sentence. They will be sentenced at a later date.
The jury heard that instead of using customers’ cash to fulfil all their orders, the bosses spent money on themselves, with lavish lifestyles, expensive cars and holidays.
Mr Adrian Keeling QC, prosecuting, told the jury: “It was not run as a proper and honest business, it was run, first and foremost, as a source of income for these defendants. It was run as a ‘cash cow’ and a cash cow to be milked.
“Their purpose wasn’t to trade responsibly, to give the customer what they ordered, on time and working properly. It was run with the simple aim of making these defendants money.
“Over three and a half years period [of trading], Foster in particular, in his own words, enjoyed a millionaire’s lifestyle and he did just that. Cox and Husselbee, on any view, received a lot of money.”
Customers were told lies to encourage them to sign on the dotted line or to stop them taking money out of the business by cancelled orders. The lies included telling customers the hot tubs were American, rather than made in China; lies about what parts and extras came with the hot tubs; lies about how long it would take to deliver and install.
The police investigation into the activities of Spaserve began in the late summer of 2010 as a joint inquiry with Trading Standards following numerous complaints from disgruntled customers.
It is thought that around 2,000 hot tubs were sold to customers over three-and-a-half years (from April 2007 to October 2010), and only in the region of 1,600 were delivered.
More than 17,500 pages of statements and exhibits made up the case and 65 witnesses – which represented the 734 customers affected by these individuals and the business – gave evidence during the lengthy trial.
Following the trial DS Rob Harvey, from the force’s Fraud and Financial Investigation Unit, said: “The conviction is to be welcomed and follows a highly complex investigation which ran over several years.
“This case highlights that fraud is not a victimless crime. It is a criminal act, and one which is motivated by greed. These three men preyed on unsuspecting members of the public by abusing their trust and callously disregarding the impact their actions would have.
“They did not care about the customers they were dealing with – they were purely motivated by securing hot tub sales and getting money.
“I would like to thank all those people who came forward and told us of their experiences at the hands of Spaserve.”