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Where’s Nevitt?

by Stuart Wilson, Wednesday 2 April 2008

The hunt is on across Europe for Raymond Nevitt, the one time components dealer turned supercar-driving playboy fraudster from Manchester, UK. International arrest warrants have been issued for Nevitt, 43, after he was found guilty of defrauding firms to the tune of US$6m following an 11-week trial.

Nevitt set up a firm called Ravelle in 1991 selling refurbished components to the PC maintenance industry, which began to struggle after initial success. Police started investigating the Ravelle Group in 2001, which by then included the companies PC2GO Ltd and Just Printers Ltd.

Witnesses at the trial claimed that the businesses started to go downhill from 1998 onwards and that Nevitt started looking for bigger and bigger deals, focusing too much on ‘wining and dining’. Witnesses also stated that Nevitt ‘had a problem understanding what was company money and what was his money,’ using company credit cards for personal expenses and travel and jetting off on foreign trips to Monaco, Las Vegas, Singapore and Verbier.

Nevitt also satisfied his passion for high-speed thrills by financing a number of high-profile company cars for himself including a Ferrari and three BMWs. The Ferrari was subsequently written off during Nevitt’s participation in the Gumball Rally. You can view what was left of Nevitt’s Ferrari post-crash here.

Nevitt was first convicted of tax fraud in 2006 but was released on bail while awaiting sentencing and promptly disappeared. Nevitt has now been convicted in his absence of the US$6m-plus fraud that left IBM Global Financing nursing the loss of approximately US$3.2m and Barclays US$1.3m out of pocket. Other creditors also lost approximately US$2m.

From 1998 onwards both Ravelle and Just Printers continued trading despite being unable to meet liabilities and thereby defrauding creditors, most notably stock suppliers. Ravelle also used factoring companies (IBM Global Financing and Barclays Sales Finance) to borrow money against orders using two methods of deception: making up invoices and representing them as real orders, and circular trading with friendly companies.

Fresh air invoicing

The Serious Fraud Office (SFO) explained how the fraud worked in their statement on the case: “Each company used the services of a factoring company (IBM Global Financing and Barclays Sales Finance). Factoring companies lend money against orders. Just as it would be an obvious fraud to borrow money against a house that did not exist, so in this case the core of the first part of the fraud is borrowing against orders that were deliberately created fictions.”

“In broad outline two methods were adopted to deceive the factoring companies into lending money. Fresh air invoicing: this was, as the name implies, the practice of simply making up invoices and pretending these represent real orders. Circular trading: this was a complex set of trading requiring considerable organisation. The point of this is to allow a continuing systematic deception of the factoring company. The relevant Ravelle company pretended it had an order from an outside company with which it had a close association, which were termed friendly companies. (They were Tracktek Industries Limited, Mad Mac Limited and Cheap Internet Access Limited),” the statement continued.

“The factoring company was informed of the order and lent money against an invoice. In due course the factoring company expected that friendly company to pay for the goods it ordered so the loan could be repaid. If the transactions had been genuine, the funds to repay the loan would have to come from the relevant friendly company,” explained the SFO.

“However, when the time came to repay, the Ravelle companies sent money through inter company transfers and via another company they controlled to the respective friendly companies. It could then appear to pay for their goods. All would appear to be well as far as the factoring company was concerned. The operation of this scheme on an ongoing basis required systematic deception of the factoring companies.”

“As time progressed, the Ravelle companies could not repay the initial loans falsely obtained without making further false claims for money from the factoring companies; thus began a growing cycle of loans based on false invoices paid by bigger loans based on more false invoices. The more the debt grew, the more fragile the deception became. Eventually, the action of one bank in returning a batch of cheques blocked the flow of funds and exposed the indebtedness of the companies,” read the SFO statement.

Commenting on this case, Detective Constable Julian King, from Greater Manchester Police Commercial Fraud Unit said: “This was a complex and elaborate fraud that allowed Nevitt to live an opulent and lavish lifestyle. However, he would not have been able to achieve it without backup from Greene and Boardman.”

“This fraud didn’t just affect banks. Dozens of staff from Ravelle in Trafford Park lost their jobs as a result of Nevitt’s crimes. Several small companies also failed both in the UK and on the Continent as a result of this fraud. Ray Nevitt has lots of contacts in the northwest, and some areas of Spain, and many people will recognise him,” he added.

Ravelle’s finance director Jeremy Greene, 48, a chartered accountant, was convicted of three counts of fraudulent trading. Kay Boardman, 49, also a director, had pleaded guilty to one count of fraudulent trading at a pre-trial hearing. Both will be sentenced later this month, along with Nevitt, if he is caught.

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