Woman who cheated debt factoring company out of £56,000 to help save her struggling business in Rugby escapes being jailed

Leamington Justice Centre, an example of the Leamington's fine architecture.
Leamington Justice Centre, an example of the Leamington's fine architecture.

A woman who cheated a debt factoring company out of £56,000 in a bid to save her struggling charitable business has escaped being jailed.

Heather Clelland, CEO of Rugby-based Voices 4 Choices, had pleaded guilty to three charges of making a false instrument and three of using false instruments.

Warwick Crown Court heard that all the money she obtained was used in a bid to prop up Voices 4 Choices, which has since gone into liquidation.

Clelland, 46, of Tomkinson Road, Nuneaton, was sentenced to 12 months in prison suspended for 12 months, with 12 months supervision and a condition of taking part in a probation-run programme for women.

And Judge Sylvia de Bertodano told her: “Had any of that money been taken for you yourself, that sentence would have been immediate.”

The court heard Voices for Choices was a non-profit-making company which provided training for people with multiple disadvantages, including mental health, drug and alcohol issues.

Prosecutor Lal Amarasinghe said its only client was Beacon Employment, and to help its cash flow Clelland entered into an arrangement with Catalyst IFG, a debt factoring company.

Mr Amarasinghe explained that when V4C invoiced Beacon for services provided, Catalyst would ‘buy’ that debt and pay V4C a smaller amount – and when the bill was eventually settled by Beacon, V4C should have forwarded the amount to Catalyst.

Although the V4C directors had discussed doing so, Clelland entered into arrangements with Catalyst without their knowledge and forged their signatures on the agreements.

As a result Catalyst advanced £23,000 on a £28,750 invoice in February 2012, followed by a further £23,000 on another invoice the following month and £10,000 an a third invoice in April that year.

Catalyst’s managing director Jeremy Lawrence believed the money was still owing by Beacon, but in fact it had been paid but had not been forwarded by Clelland.

She then contacted Mr Lawrence to tell him that a liquidator had been appointed for V4C and that Catalyst’s details had been passed on as a creditor.

But she had not done so, and Mr Lawrence only found out about a creditors’ meeting when he spotted a legal notice; so he attended and spoke to the V4C chairman who revealed that she knew nothing about the three advances.

Mr Amarasinghe said that as a result of Clelland’s dishonesty, Catalyst had lost £56,000.

When Clelland was interviewed by the police she admitted forging the directors’ signatures on the agreement documents, explaining that the money had been used to keep V4C, which had a staff of 11, going.

Andrew Tucker, defending, said Clelland had worked as a hotel manager until suffering a mental breakdown 14 years ago and spending eight weeks in hospital.

Her contact with mental health organisations led to her becoming involved in creating Voices 4 Choices, which was set up with charitable purposes to provide training for people with multiple disadvantages.

It expanded to the point where it employed 11 people, but it relied very heavily on its contract with Beacon which reduced its spending after the financial crisis of 2007/8.

She had explained the situation to the directors, and the possibility of entering into a debt factoring arrangement was discussed – but Clelland then went ahead without getting the go-ahead of the directors and forged their signatures.

But Mr Tucker stressed: “None of the money was for her personal gain. The main motivation was to keep other people’s jobs and to keep the organisation afloat.”

Judge de Bertodano told Clelland: “If you thought you had the support of the board to do this, it would never have been done in such an underhand way. But I accept none of this money was obtained for your personal benefit.”