First Capital Factors Ltd which went into Administration just over two years ago has just filed a notice at Companies House that the Administration has finished.
The Statement of Affairs showed a deficit of just over £5.6m which begs the question where did it all go as surely a small supposedly profitable factoring company couldn’t lose that amount of money in it’s normal way of business.
It seems that a number of their clients were asked to raise fictitious invoices for what were evidently substantial amounts of money which unless I am missing something is fraudulent on behalf of the person or persons who asked them and those that supplied the fraudulent invoices which to my mind is criminal.
This isn’t a victimless crime as whilst people may not have much sympathy for banks in the form of Leumi a loss of close on £2m was made by the 350+ investors from the Thincats syndicate who recovered not a single penny back from this debacle. The investors in Thincats aren’t all multimillionaires but are ordinary people like you or I who looked for a slightly higher return on their savings than on offer from the mainstream banks.
I would have thought that after two years and with the Administrators having reported their findings into the conduct of the individuals in the company as well as the clients’ involvement that some murmurs would have been heard about fraud enquiries.
Us outsiders won’t know which of their clients were involved but as most of the clients went either to Leumi ABL or elsewhere after the Administrators were appointed I would guess that the tainted ones are those clients that didn’t move at all.
I am aware of one of their clients who switched their business out of the company factoring with First Capital Factors to a previously dormant and fresh company at about the time of the Administration and wonder if they are one of the companies involved as I understand that the principals of the company were long standing friends of the chairman of the factoring company.
In the late seventies there was a similar situation at Bank of America’s factoring subsidiary where a group of their clients submitted fraudulent invoices at the behest of the factoring company’s directors and that ended up with three and four year jail sentences for the two executive directors of the factor who organized the fraud plus two directors of the clients who issued the invoices.
Somehow I don’t think that we have heard the last of this.