'Web of deceit' fraudster plundered Covid scheme

A fraudster who stole £1.5m in a "web of deceit" targeting banks and the Covid-19 support loans scheme has been jailed.

Timothy Nellis, 58, channelled money defrauded from banks into two massive cannabis farms before plundering some £722,000 meant to help businesses survive the coronavirus pandemic, Newcastle Crown Court heard.

His first scam with accomplice Sundeep Chahal, 45, involved the creation of dozens of fake companies but was busted after they failed to pay the bill at a Newcastle hotel they were using as a base.

Both denied multiple offences but were found guilty by jurors, with Nellis jailed for 17 years and nine months, and Chahal, who is on the run, for 20 years.

Judge Tim Gittins said Nellis, who had almost 60 frauds on his criminal record, was "by some distance the most dishonest" man he had encountered in a 35-year legal career.

Nellis, of Mitford in Morpeth, and Chahal, of Shepherds Court in Durham, were both convicted of offences including fraud, money laundering and production of Class B drugs following a six-month long trial which concluded in June, the court heard.

Judge Gittins said the evidence was "overwhelming" that the pair had master-minded a "sophisticated" fraud between 2016 and 2019.

The pair set up multiple shell companies purportedly linked to waste recycling, through which they got bank loans via so-called "fresh air invoicing", the judge said.

Fake documents were created in the "intricate web with layers of deceit" and "puppet directors", some of whom were "wilfully blind" and others who were naive and "duped", were recruited, the court heard.

Nellis also used "countless aliases" on the documents, the judge said, with prosecutor Stephen Grattage saying Nellis had at least 37 alter egos.

The judge said the partnership was a "marriage" of the men's "dishonest skills".

While Chahal used his experience and contacts in the industry and knowledge of the banks to carry out the fraud, Nellis was the "arch-manipulator behind the scenes", Judge Gittins said.

But, among the "fraudulent plates spinning", Nellis forgot to pay a bill at the Grand Hotel Gosforth Park for a room he was using, the judge said.

In April 2019, staff entered the room and raised the alarm after being confronted with reams of paperwork left scattered around by Nellis, the court heard.

The judge said police quickly realised the hotel room was a "boiler-house for fraud", with meticulous crib sheets, documents for about 30 shell companies, multiple mobile phones - each dedicated to a different fake firm - and £16,000 in cash being discovered.

In total, the fraudsters had stolen about £825,000 from various banks, the court heard, none of which was likely to be recovered.

Nellis then set up a new fraud between April and November 2020 by making "wholly false claims" to get some £722,000 from the government-supported bounce back loan scheme for 15 shell companies which he then immediately wound up, the court heard.

Judge Gittins said the fraud was "particularly mean" as Nellis was "cynically taking complete advantage of the country's attempt to ameliorate the damage" caused to businesses and workers by the lockdowns.

The men used the money made in their joint fraud to set up two industrial-scale cannabis farms, the court heard.

The first, in a unit on New York Way in North Tyneside, had 750 skunk plants with a yield of £150,000 per harvest growing in it when police raided it in January 2019, the court heard.

The men's second farm, on Queensway North at Team Valley, Gateshead, was even bigger and employed three illegal immigrants from Albania as farmers, the court heard.

When police discovered it in February 2020, there were some 2,500 plants which would produce a yield of between £250,000 and £800,000 per harvest, with an estimated four harvests per year, the court heard.

It was calculated Nellis and Chahal had made about £800,000 from the cannabis farms, the judge said.

They also set up a website illegally selling prescription drugs imported from Asia which earned them about £600,000 over a six-month period, Judge Gittins added.

Chahal, who absconded during the trial and was later also found guilty in his absence of arranging the supply of thousands of pounds worth of cocaine from Columbia to Ireland during the pandemic, lived a "lavish and ostentatious" lifestyle, the judge said.

Accountant Charline Alston, 44 and of Parkhead Drive in Edinburgh, admitted money laundering for her part in the Covid-19 scam, having helped Nellis get £70,500 for four fake companies.

She was jailed for 18 months, suspended for 18 months, with 200 hours unpaid work.

Nellis was banned from being a company director for 15 years, with Judge Gittins saying he wished he could make it a lifelong order, while Chahal was disqualified for 12 years and Alston for five.

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