A man and wife who defrauded banks out of more than £300,000 by cashing cheques before they bounced have been jailed for two years and 15 months respectively.
Gambling addict Hasmukhbhai Patel, 32, and his wife Ilaben Patel, 41, of Albert Road, Wellingborough, were jailed at Northampton Crown Court today after admitting cashing 31 cheques between them from an account containing no money for more than £300,000 over two years.
Judge John Steel QC, sentencing, said: “The fraud concerns what can only be described as the exploitation of a loophole found by Mr Patel in the banking system of the United Kingdom.
“It’s a very simple fraud in terms of its ingenuity, albeit was highly successful for two years.”
In all but one case, Mr Patel would open an account with Barclays Bank and deposit a cheque, usually for between £10,000 and £20,000, from his ICICI Bank account, which contained no money.
Mr Patel would then open another Barcalys account, usually using the bank’s telephone service, and transfer the funds to the new account before the cheque bounced.
He would then withdraw the money before the bank realised the error or distribute it to other accounts held by friends or family.
Mrs Patel withdrew a total of between £52,400 and £70,500 on eight occasions to give to her husband.
Mr Patel would use his own name or a previous name he changed by deed poll to open the accounts, but would give a false address making it hard for the bank to track him.
Barclays failed to spot the error for two years despite transferring funds before they have cleared being against its banking procedures. ICICI failed to flag up the 31 cheques which bounced between August 2008 and September 2010.
Mr Steel said: “To allow a person, often using the same name at the same branch while using the same identification, to open multiple bank accounts, which are then manifestly misused, is extraordinary.
“This man walked in with his own passport to open these accounts. The inadequate systems exposed by these offences must raise serious questions about the banks’ conduct.”
The couple, who leave two sons aged eight and 10 with social services as they enter prison, have already lost their house and Mr Patel’s job to his serious gambling addiction.
Mr Patel held his head in his hands as the court heard how he lost tens of thousands of pounds at a time on the tables and roulette machines of casinos, including Aspers and Gala in Northampton.
John-Lloyd Jones, mitigating for Mr Patel, said: “On occasions it was within an hour of the money being withdrawn that the money was played and lost in a nearby casino.”
Mrs Patel was jailed for 14 months and Mr Patel given a four-month suspended sentence last June after she admitted obtaining two passports with her name but others’ photographs with his help in a bid to get Indians into the country illegally.