Trustee ordered to repay £200,000 to miners' charity

20 May 2019 News

A trustee at Nottinghamshire Miners’ Home has been ordered to pay £200,000 compensation after a Commission inquiry confirmed they spent charity funds on private building works.

The Commission published the findings of its inquiry today, concluding that all three trustees under investigation failed to adequately discharge their legal duties.

The statutory inquiry was opened in August 2007 after the Serious Fraud Office flagged that the charity’s trading subsidiary Phoenix Nursing and Residential Home may have been misused by two trustees.

The inquiry raised wider concerns about all three trustees at the charity, in terms of their management and oversight.

Harvey Grenville, head of investigation and enforcement at the Charity Commission said: “This case involved an appalling and cynical misuse of funds intended for deserving people.

“Through the diversion of money for personal comfort, vital resources were taken from those they were there to help.

“Charities exist to improve lives and strengthen society, but the actions of these individuals meant that a community was badly let down.”

Trustee faces four years in jail

The £200,000 was claimed under the Proceeds of Crime Act, which covers the £150,000 misspent through fraud and £50,000 in interest.

The trustee ordered to pay was convicted of 14 counts of theft and automatically disqualified from trusteeship and was sentenced to four years in jail.

The second trustee brought to a hearing in 2012 was found not guilty, but the Commission found them responsible for misconduct and mismanagement.

Limitations on the Commission during the inquiry meant it could not disqualify the second and third trustees in spite of their involvement, because their trusteeships had already lapsed.

£1.1m to Nottingham Miners Welfare Trust Scheme

An interim manager and new trusees decided to wind up the charity and its remaining funds, £1.1m were transferred to Nottingham Miners Welfare Trust Scheme, to support those connected with the Nottinghamshire coal fields.

NMH was removed from the register in January 2017. 

Commission inquiry powers

In the wake of the inquiry the Commission fought successfully for new powers under the Charities (Protection and Social Investment) Act 2016.

Using existing powers, it gained information from the charity and its subsidiary’s banks, and from the trustees and the charity’s accountant, which revealed the extent of the fraud.

It also provided witness statements and gave evidence for the prosecution at the hearing and worked with the Serious Fraud Office and South Yorkshire Police in its inquiry.

The Commission was responsible for appointing an interim manager at the charity in 2008 after concerns were reported for £1.5m from the sale of a care home in Lincolnshire.

 

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