A TRACTOR dealer who fraudulently claimed £29,000 to keep his business afloat has been given a six-month suspended prison sentence after a plea for leniency.
Stephen Gowan, 49, an agricultural engineer at the heart of the East Riding farming industry, hit hard times after spending £120,000 expanding his business from Bempton to Kellythorpe Industrial Estate, Driffield, only to lose a lucrative tractor franchise.
Hull Crown Court heard on Monday that with debts mounting two tractors became the subject of false hire-purchase applications to a leasing company.
He sold them without their permission and used cash from the sales to try and stave off economic disaster.
The firm went in to liquidation, but he has since returned to agricultural machinery supplies under a different name.
However, the court heard he risked prison after a criminal investigation into the frauds despite paying back 30 creditors.
The Judge, David Tremberg, allowed him to walk free from court, imposing a 26-week suspended prison sentence, but warned him he could have been jailed if he had tried to fight a trial and put the blame on others.
“You have pleaded guilty to two offences of fraud,” Judge Tremberg told Gowan. “The business community and business transactions are based to a substantial extent on trust.
“That is how the system works. In this current financial climate it is difficult enough.
“It is only when people can trust one another that we can go forward. I am told your victim would have lost in the region of £40,000, claiming that amount, had your business still been solvent.
“This was a substantial amount of money and a breach of trust.”
Gowan, 49, of High Street, Bempton, pleaded guilty to two offences of fraud by making false statements on hire purchase agreements for tractors between October 7 2008 and November 6 2009.
Both concern the loss of cash for two Valtra tractors – one costing £32,312, the other £26,494 – while he operated S.T. Gowan Ltd.
They were both sold to raise cash.
Crown barrister David Dixon said: “He found himself in debt and was trying to borrow from Peter to pay Paul. He became involved in fraudulent transactions to keep his business afloat.”
He said the matter was aggravated because he had actually sold the second of the tractors before completing the paperwork for its hire purchase agreement.
Mr Dixon said the original business had gone into voluntary insolvency. Depending, on the value of part exchange equipment, the loss to Ing Lease Ltd could be between £29,606 and £70,000
Defence barrister Richard Thompson said the loss was the lower figure.
Mr Gowan, a married father, was trying to keep the business running in circumstances where he could have walked away and placed the company in liquidation.
“He has been in the business all his life, running a successful franchise from Bempton,” said Mr Thompson.
“The manufacturers of tractors encouraged him to move to bigger premises in Driffield closer to the hub of farming businesses. He was reluctant to do so. This caused him to spend £120,000. Within a year of that the franchise was withdrawn.
His bank was significantly restricting his over draft and asking him to provide monthly financial accounts. He took financial advice and was told the Government may provide assistance for small businesses.”
He said that never came and he went into to liquidation. He said he has since returned to the industry working with the same people who were creditors.
Mr Thompson said “He said to me: I made a mistake. It is up to me to sort it out.” He said his was back working again paying back 30 creditors he owed money to.
Judge Tremberg ordered in addition to the 26-week suspended prison sentence he must live and sleep at his home in High Street, Bempton for 26 weeks.