Shameless fraudster conned £1,000s from public during Covid after applying for bounce-back loans

Arrogant Timothy Paul Nellis, 58, and Sundeep Chahal, 45, ran a complex, multi-layered system which saw them de-fraud financial institutions and then re-invest their ill-gotten gains into building industrial-sized cannabis factories.

Jailing him at Newcastle Crown Court, His Honour Judge Tim Gittins described Nellis, a grandfather, as "by some distance the most dishonest man I have come across in a 35-year career".

Chahal, who was sentenced in his absence, received a 20-year term for his involvement in the financial scams as well as conspiracy to supply cocaine.

During the pandemic, Nellis recruited Charline Alston, 44, to help when he created 15 companies to take advantage of the government's bounce back loans, which were granted during the height of the pandemic so firms could stay afloat and pay their staff.

Alston, who had no previous convictions, worked as an accountant to support the applications for the loans and gradually became aware of the scheme Nellis had constructed, Newcastle Crown Court heard, while she also became a director of some of the companies set up.

She was jailed for 18-months, suspended for 18 months.

Judge Gittins described how Nellis, from Mitford in Morpeth, gained government funds in excess of £700K before winding up the companies, meaning the money could not be recovered.

He added they had taken "complete advantage of the country's attempts to ease the damage of lockdowns" and that Nellis, who was jailed for 17 years and nine months, played a "leading and sophisticated" role.

He was found guilty after a six-month trial of conspiracy to commit fraud, transferring criminal property, conspiracy to produce cannabis and supply class C prescription medicines, converting cash, transferring the proceeds of criminal website sales and breaching a disqualification order banning him from being a company director.

He admitted a second count of conspiracy to commit fraud.

Alston, of Parkhead Drive, Edinburgh, who the court heard played a "limited" role, previously pleaded guilty to a charge of transferring criminal property.

The only reason police initially became aware of the massive scam was because Nellis, who was using a hotel room as a hub for the fraud, did not pay his bill.

He had been staying in room 249 of the Gosforth Grand Park Hotel in Newcastle between October 2018 and April 2019, and had already coughed up £6850.

But when he failed to pay on one occasion, housekeeping entered his room to find a haul of documents, mobile phones and other items, and called the cops.

Police found an "office" containing paperwork, crib sheets of directors and banking details, credit and debit cards and burner phones relating to numerous companies, which were being run from the room.

Some 30 "shell" companies were being controlled by Nellis and he had "everything he required to control them was within the hotel room", the court heard.

There was even a dictaphone with Nellis talking through the specifics of setting up shell firms and virtual offices.

The companies and their bank accounts and their directors were probed and a sophisticated fraud was discovered from which money was being laundered, and then used to finance cannabis warehouses and the sale of unlicensed prescription medication.

A series of shell companies were used to make others appear like legitimate, solid companies with invoices to be paid, the court was told.

They were so convincing that Ultimate Finance, Lloyds Bank, Aldemore Bank and Barclays Bank felt confident to offer loans to the companies in return for a proportion of those invoices valued - a financial product called "factoring".

But the invoices did not exist and were never paid and those institutions lost £825,000.

With the proceeds of their dodgy money, Chahal and Nellis developed two "substantial" industrial commercial units to harvest cannabis plants, pouring in tens of thousands of pounds into the operation, Judge Gittins summarised.

One was in New York Road in North Tyneside and had an estimated yield of around £150,000.

The other was at Team Valley Industrial Estate in Gateshead and had an estimated harvest worth up to £825,000.

Judge Gittins, before handing down sentence, described Nellis as the "behind the scenes arch manipulator" while Chahal, of Shepherds Court, Durham, had previous knowledge and contacts within the industry.

"It was a marriage of those dishonest skills, the coming together of two people on a grand criminal scale," he said.

He described Nellis as having a relatively privileged upbringing with a mum who worked hard to create a medium sized care home that he could have succeeded in.

He had 58 previous convictions.

"There is no suggestion that your sons and grandchildren had any idea. You have brought shame on them and your elderly mother.

"I see no evidence of real remorse beyond self-pity at being caught." Judge Gittins said.