Andrew Thorne was sentenced at Blackfriars Crown Court after admitting to fraudulently obtaining payments for car sales at the Ken Thorne Group of companies ("KTG") prior to its collapse. His brother, Nigel Thorne, had previously been tried and sentenced and is currently serving his prison sentence after a jury found him guilty of obtaining money transfers by deception and of theft. This was a joint investigation into a £6 million asset-stripping fraud by the Serious Fraud Office and South Wales Police.
The KTG cases: R v Andrew Thorne and R v Nigel Thorne
Offences
Andrew Thorne pleaded guilty to 4 charges of theft contrary to s.1(1) of the Theft Act 1968.
Nigel Thorne was found guilty of 49 charges of obtaining a money transfer by deception contrary to s.15A(1) of the Theft Act 1968 and of 2 charges of theft contrary to s.1 of the Theft Act 1968. Another man in the same trial was acquitted of all charges.
Sentences
Andrew Thorne, date of birth 20 August 1969, was sentenced to nine months imprisonment, suspended for two years.
Nigel Thorne, date of birth 27 April 1967, was sentenced to a total of 3 ½ years on 2 April 2009.
In addition, Andrew Thorne was disqualified from acting as a company director for five years and Nigel Thorne was disqualified from acting as a company director for three years.
Sentencing Andrew Thorne, HHJ Pillay said today that while the company for which he was responsible was in crisis, he caused sums to be diverted into his own bank account and diverted them for his own ends thereby committing a fraud on the company.
In passing sentencing on Nigel Thorne, HHJ Beddoe referred to Nigel Thorne's significant dishonesty which, in the case of the Ferrari, he said couldn't have been more blatant. He described the way the business was run as a "milch cow" with unsustainable amounts of cash being withdrawn by the directors. He also referred to his lack of co-operation or expression of remorse and said that the sentence had to send a message to others who might behave in the same way.
Confiscation proceedings are continuing.
Background
KTG had been founded in the 1960s by Ken Thorne and became a major employer in the South Wales area. Its business was the sale of cars and it was one of the first 'car supermarkets'. Ken Thorne and KTG had a high profile, sponsoring Cardiff City Football Club and competing in World Powerboat Championships, in which Ken Thorne was world champion in 1997. All Ken Thorne's four children, including the defendants Andrew and Nigel Thorne, were involved in the running of the business. Nigel Thorne had been a director of two of the KTG companies and ran the flagship business Ken Thorne World of Cars in Penarth Road, Cardiff. Andrew Thorne ran the Ken Thorne Motor Village in Gorseinnon, just outside Swansea.
The Frauds
On 6 September 2002 all the companies in KTG ceased trading and were subsequently put into liquidation. In the months leading up to the collapse KTG was experiencing severe financial difficulties which were apparent to the defendants.
As part of its regular business dealings KTG would raise finance from finance companies on cars it purchased. This finance was obtained on the clear understanding that KTG had paid suppliers for these cars and so could pass good title to the finance companies, who naturally would only lend on property which was unencumbered by other debt. However in the months leading up to the collapse Nigel Thorne falsely represented to the finance companies that, in respect of 49 cars, KTG had paid for the cars and had obtained clear title which could be passed to the finance companies. In reality KTG had not paid the supplier anything for these cars. The amount thus obtained from the finance companies was £402,212.35.
Most of the cars on the KTG sites had finance outstanding to finance companies but after the collapse, Nigel Thorne allowed the supplier of the 49 cars to remove them from the sites despite the protests of the finance companies, whose representatives were present attempting to secure and preserve their assets. The creditors of KTG subsequently appointed a liquidator, but as the business was insolvent none of the money dishonestly obtained from the finance companies was recovered.
Nigel Thorne also bought two high value vehicles, a Ferrari 360 Modena and a Mercedes CL500, on personal hire-purchase terms. He then sold the vehicles before he had completed the payments, in breach of the hire purchase agreements, leaving the finance companies with a loss totalling £113,466.27.
In the weeks before the collapse four customers of the Ken Thorne Motor Village arranged to purchase new cars when the new registration number (52) was available at the beginning of September. These customers paid deposits to the business but were asked to, and did, write cheques payable personally to Andrew Thorne for the balance. The result was that Andrew Thorne pocketed £34,770 just before the collapse of KTG.
The liquidator found a number of suspicious transactions and other irregularities in the months leading up to the collapse. A report was made to the Department of Trade and Industry (as it then was) which referred the matter to the SFO.
The Prosecution
South Wales Police and the SFO commenced a joint investigation in December 2003. Andrew Thorne was charged in May 2007 and Nigel Thorne was charged in September 2007. Nigel Thorne's trial was held at Southwark Crown Court between February and March 2009 and he was sentenced in April, but the judge imposed reporting restrictions until the conclusion of Andrew Thorne's trial. Andrew Thorne's case was listed for trial on 2 November 2009 at Blackfriars Crown Court but he pleaded guilty on that date.
