A fraudster who brought the Teesdale Mercury to the brink of bankruptcy has escaped a jail sentence.
Former financial manager David Vasey, 63, was handed a 24-month prison sentence suspended for 18 months at Durham Crown Court on Thursday, April 23.
He was initially charged with seven counts amounting to more than £100,000 when he appeared at Peterlee Magistrates’ Court last year but the defence disputed the amount involved.
After negotiations between parties, Vasey pleaded guilty to a single combined charge of fraud by abuse of position amounting to £75,000 in February.
During the sentencing hearing, Durham Crown Court heard that Vasey had repaid £75,000 to former Teesdale Mercury owner Carolyn Vane.
Prosecutor Martin Towers told the court that Vasey was first appointed as financial director in June 2012 and was later promoted to managing director in October 2015.
He noted that Ms Vane’s statement said Vasey did not want a pay rise because the promotion did not impact his workload.
He added that Vasey had resigned in September 2016 “amidst confusion concerning profit forecasts”, accountants calling for a meeting and “Inland Revenue had been trying to meet with him at the time”.
Mr Towers said: “Substantial problems concerning the company’s finances and associated records came to light following his departure.
“As matters were investigated further it became evident that those problems arose from irregularities in the defendant’s conduct.
“He had been engaging in persistent and widespread fraud in order to benefit himself at the company’s expense.”
He said Vasey committed the fraud through unauthorised over-payment of salary to himself, misuse of petty cash, overpayment of personal expenses claims, using the company credit card for personal expenditure, paying himself for directors’ meetings that had never taken place and over-paying his travel expenses.
Quoting Ms Vane’s statement, Mr Towers said: “The high value of this crime endangered the viability of the Teesdale Mercury and put at risk the livelihoods of our employees.
“No one can better understand the perilous state of our finances than David Vasey and he had gone to lengths to ensure that no one else fully understood the level of debts, or the money he was taking.”
He added that Ms Vane believed that Vasey was ‘expecting the company’s imminent bankruptcy would serve to conceal his misconduct’.
It was revealed that the Teesdale Mercury entered into a Company Voluntary Arrangement (CVA) with the parties it owed money to, the most significant of which was HMRC.
As part of the CVA the company was forced to sell its premises at 24 Market Place, as well as the Galgate News building, Mr Towers said.
He concluded by saying Vasey was arrested in September 2017 and was interviewed on four separate occasions until June 2018 during which he denied dishonesty.
For the defence Barrister Christopher Knox recognised the level of criminality warranted a custodial sentence but asked that it be suspended because of Vasey’s previous good character, he is unlikely to reoffend, and he had retired to France posing no risk to anyone in Britain.
The defence added that Vasey’s wife depends on him because she is very ill and has mobility issues.
Mr Knox noted that he had repaid £75,000.
In delivering his conclusion Judge Nathan Adams said: “Giving back £75,000 now is not the same as if you had never taken it in the first place. The effect on all those at the time was substantial.”
Referring to the pre-sentencing report, the judge noted Vasey had told Probation Services that he took the money because he had not had a pay rise and felt entitled to it.
The judge added that the amount of cash defrauded from the Teesdale Mercury put it at category three, which has a starting point of 30 months in prison, and can range from 18 months to four years.
The judge said: “Had there been a trial a sentence in the region of 32 months in prison would have been justified. You indicated to this court you would plead guilty to fraud and on this basis you are entitled to 25 per cent credit. That brings the sentence down to 24 months.”
The judge decided to suspend the sentence for 18 months.
He added that 200 hours of unpaid community work would not be suitable because the defendant lives in France.
Judge Adams concluded: “That 24-month prison sentence hangs over your head for the next 18 months and if you commit any further offences of any kind you will start serving that sentence.”
