Tuesday, September 13, 2011

Shared-ownership boat boss jailed for fraud

Ed Rimmer, boss of shared-ownership narrowboat firm Challenger Sydicateships, was jailed for two and a half years at Worcester Crown Court on 9 September 2011 after pleading guilty to 18 fraud charges connected with the running of the company that amounted to £536,000.

Rimmer had previously admitted three counts of fraud by abuse of a position of trust, eight counts of obtaining a money transfer by deception, three counts of false accounting and four counts of theft. He was convicted of fraud amounting to £536,000.

He owned and ran two boating businesses, he was a Partner in Challenger Syndicateships which managed canal boat ownership syndicates, and a Director of Challenger Syndicateships Limited which organised syndicates for powerboats and yachts.

Detective Constable Dianne Knight of West Mercia Police's Economic Crime Unit, said: "I am satisfied with the sentence handed down today. This has been a long and complex investigation and I would like to pass on my thanks to the victims in this case who have been very patient and helpful." 

One of Rimmer's victims, William Laker said: "Although my loss financially has not been as great as some other victims it was still relatively speaking a major sum of money to me and my family. I am now retired and at the time of the crime I was a couple of years away from retiring and the lost money was a considerable part of my retirement fund. Its loss therefore has caused me much anxiety and stress and a few sleepless nights.

"In my view this crime is more distasteful than say a casual burglary committed usually by persons unknown to you. I trusted Ed Rimmer to handle my affairs relating to our boat share and its sale in an honest and fair manner and the fact that he lied to me and stole the proceeds from the sale of my boat share really made me feel very angry at the time and left me feeling extremely disappointed and let down. It will have a lasting affect on my life because simply it is money I no longer have and when retired every pounds counts.

"Since this whole experience I feel very wary of entering into any other similar venture."

Rimmer set up Challenger Syndicateships in 1989 and owned narrow boats across the UK and France. The syndicates worked in a similar way to time share properties, where a number of people shared the ownership of the boat and shared the time spent holidaying on the boat.

Each boat cost in the region of £80,000 - £90,000 with an average of 13 parties sharing each boat with a share costing a maximum of £12,000. 

Challenger Syndicateships would take a proportion of the amount paid by each party as well as an annual management fee to cover servicing and other expenses, such as insurance licences.

In 2003, Rimmer branched out into powerboats and yachts operating out of Spain, which managed boats costing around £500,000 - a share would on average cost £75,000.

Both companies operated until January 2008 when both businesses went into administration.

It was at this point that Rimmer's operation was revealed as illegal. He had been committing fraud in a number of ways, most notably:

  • In 2004, Challenger Syndicateships started buying older boats from syndicates and source a new one for them, using the older boats as hire boats for holidaymakers. The purchase capital was invested by sponsors (individuals or local businesses) who in return got around 10% interest on their investment capital. It was found that Mr Rimmer had offered sponsorship of the same boats to two and even three different parties, each time taking a lump sum of up to £90,000. When Challenger Syndicateships when into administration, up to three owners expected to have ‘their' boat returned to them.
  • Mr Rimmer would utilise the maintenance fees paid for one boat in order to pay debts due on other vessels. He would thereafter produce false accounts to disguise this activity giving the impression that the maintenance funds for each boat were healthy when in fact the contrary was often true.

Rimmer's barrister put forward extensive mitigation including the fact that Rimmer was 66 years old, of previous good character and that he had been both a foster carer and had adopted children. He went on to present the Judge with 40 references of good character and mention was made of charity work, recent deaths in his family and that conditions in prison could be harsh for a man of his age.

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