John David Hulme is sentenced to six years for dishonestly claiming £495,857, while Darren Price is jailed for two years and three months for claiming £318,798
Two former directors of the now defunct bus operator Padarn Bus of Llanberis, Gwynedd, have been jailed for their part in a concessionary fares fraud amounting to around £800,000.
On Thursday (March 24), the firm’s MD John David Hulme was jailed for six years, while Darren Price, who first revealed the fraud to a consultant chartered accountant working with the company and later pleaded guilty at the trial, was sentenced to two years and three months in prison. The court found that Dave Hulme had dishonestly claimed £495,857 from Gwynedd Council, with Darren Price claiming £318,798. Dave Hulme, 55 and a father-of-eight, plead his innocence throughout a six-day trial but was convicted of false accounting after two and a half hours of deliberation by the jury. He was handed the maximum sentence available for category 2a fraud, which can range from three to six years, with a starting point of five.
The Daily Post reported that the directors had falsely inflated claims to Gwynedd Council that their buses had carried around 20,000 more concessionary fare passengers each month than they actually had, in order for the company to receive a higher amount of concessionary fares reimbursement than it was due. The fraud went on from July 2011 until January 2014. The firm ceased trading on May 30, 2014, with debts of £2.379m and the loss of 84 jobs.
The situation was revealed by Darren Price when he told Simon Thelwall-Jones, a chartered accountant working as a consultant for the company, that he had ‘something to tell him,’ on March 11, 2014.
At a six-day trial at Caernarfon Crown Court, the jury was told about the scale of the fraud which began to emerge.
Dave Hulme had denied falsely claiming £495,857 between July 2011 and September 2012, when he was suspended from his job for an unrelated matter.
The court was told that he then wrote notes and instructions for his fellow director Darren Price on how to continue the scam.
At an earlier hearing in October 2015, Price pleaded guilty to his part in carrying on with the fraud, falsely claiming £318,798 between January 2013 and February 2014.
At the same hearing, the court ordered that fraud and false accounting charges denied by Darren Prince’s sister, Anne Price, 29, were to lie on file.
As well as adding non-existent passengers to their monthly claims, Caernarfon Crown Court heard how Hulme and Price doctored their claims by extending the period for which they were claiming from four to six weeks.
On one occasion, a report showed the company had carried 32,707 passengers who were eligible for concessionary fares. However, the fares were altered to make it look like 50,900 had travelled instead.
Barrister Matthew Dunford, for the prosecution, said Padarn Bus had around 80 employees and a fleet of 43 buses. The firm had an annual turnover of £2.4m.
He said Hulme was responsible for generating the false documents to support the false claims.
Hulme, he said, did not dispute that a fraud took place but maintained that ‘he was not responsible for it.’ He claimed he had become suspicious that ‘something was not right’ shortly before he was suspended.
Padarn Bus Limited was formed on April 7, 2009 with the merger of two bus companies located almost within spitting distance of each other in the same village – KMP, of which Hulme had been manager for many years – and Padarn Bus Llanberis, operated by Darren Price and his father Dafydd.
They borrowed £645,000 from RBS, £425,000 from Finance Wales and £390,000 from a hire purchase company – a total of £1.4m. The company’s monthly repayments were just under £18,000.
In 2011, the firm found it owed HMRC £268,000 tax arrears. The first fraudulent claim was made that July.
Finance Wales brought in a consultant, chartered accountant Simon Thelwall-Jones to help pay back the arrears.
Once Price realised Mr Jones was looking into its affairs, ‘the game was up,’ the court heard.
On March 11, 2014, Darren Price told Simon Jones: “Sit down. There is something I need to tell you.” Simon Jones then reported the matter to Gwynedd Council and the police.
In his closing speech, defending barrister Matthew Curtis said Dave Hulme may be a “bit of a geek” and “loves buses,” adding that the fraud was not carried out for personal gain, but to keep the company afloat.
After the guilty verdicts were reached, Judge Merfyn Hughes QC told Dave Hulme that he would inevitably face custody.
The judge was told that Dave Hulme had debts of £74,000 and now worked as a manager with another Gwynedd operator, Express Motors of Penygroes. Hulme’s family received child credits and benefits.
Judge Merfyn Hughes QC told the court: “Any fraud of this magnitude is serious, not just because it continued over a sustained period of time but because it was against scarce public funds.”
Addressing Hulme, he said: “Between July 2011 and December 2012 you committed a fraud which gained your company £495,857. You were the MD and therefore in a position of responsibility.
“You were well-known to Gwynedd Council who trusted you to make only claims to which the company was entitled. You had a vested interest, not only by maintaining your own employment in June 2011 when the company was in the serious financial difficulty.
“Your defence was to blame Louise Price, the sister of Darren Price – she was a junior employee. You had an opportunity to admit to your crime during your evidence but you did not do so.”
The judge was told by police that they would be making an application under the Proceeds of Crime Act.
North Wales Police welcomed the sentence handed out by the court. Senior Investigating Officer Superintendent Iestyn Davies said: “The loss to the Welsh Government is in excess of £800,000, and this was public taxpayer money. There was a substantial impact to the local community with over 80 full and part-time employees of Padarn Bus losing their job when the company folded.
“North Wales Police welcomes the sentences and hopes it sends a clear message out that North Wales Police and the CPS will fully investigate offences of this nature and ensure offenders are brought to justice.”
After the verdicts, a Gwynedd Council spokesman said: “This was an extremely serious case in which substantial sums of money were fraudulently extracted from the public purse.
“Since the council referred the matter to the police back in March 2014, we have been working closely with the Welsh Government to review monitoring procedures with bus operators who claim for concessionary fares.”
A Welsh Government spokesperson said: “Local authorities are responsible for the reimbursement of bus operators under the concessionary fare scheme. A number of measures to detect and prevent similar frauds have already been introduced and we continue to work with local authorities on developing additional measures.”