A former Perthshire offshore company boss has been jailed for embezzling £31,500 after “downplaying” the impact of his crime.
David Kellas, former co-director of Aberfeldy-based Tec Offshore, used funds from the company to repay money he had taken from two outside investors.
The 66-year-old first offender appeared at Dunfermline Sheriff Court for sentencing after earlier pleading guilty to forming a fraudulent scheme and embezzlement between May 22 2017 and July 26 2019.
A sheriff jailed Kellas for 12 and a half months.
Duped investors
The court heard previously Tec Offshore Ltd, a marine electrical consultancy company, was set up by Kellas and Gordon Leighton in 2010 and they were joint directors.
Prosecutor Douglas Thomson said the company bosses discussed a business project investment opportunity with a local fish and chip shop owner, Muhammad Ikram, who agreed to invest £30,000 in the company with a promised 40% return.
Pleased with his returns on this investment, Mr Ikram agreed to put more money into the company after a further meeting with Kellas only.
Mr Ikram believed he would be investing in the company, with the funds being used for various offshore projects, the fiscal said.
He agreed to invest even bigger sums of money on two further occasions, bringing the total capital investment to £150,000 on the understanding he would get a £216,000 return.
The court heard Mr Ikram’s brother was also involved in putting in money.
The fiscal depute said Mr Leighton had no knowledge of any of these further investments.
Fraud uncovered
Mr Thomson said in order to sustain the repayments being made to Mr Ikram, Kellas needed to request the transfer of “significant sums” from the company bank account into his director’s account.
Mr Thomson said it appeared Kellas suffered a number of serious health issues in the summer of 2019 and at this stage payments from him to Mr Ikram ceased.
After trying unsuccessfully to contact Kellas about it, Mr Ikram went to Tec Offshore in October 2019 and told a company secretary about the money owed to him and his additional investments.
Mr Leighton was advised and confirmed he had no knowledge of the further investments and that the money had not gone into the Tec Offshore account.
He challenged Kellas over the phone but the accused claimed it was a separate personal agreement and had nothing to do with the company.
Police were contacted in November 2019 and Kellas, of Church View in Winchburgh, West Lothian, was later arrested in relation to fraud.
£31,500 loss
During a police interview, Kellas said he left the company at the end of 2019 due to a “breakdown of his relationship” with Mr Leighton but did not elaborate.
The fiscal depute said that throughout the libel period there were “significant repayments” made to Mr Ikram, though he did not receive any of the promised 40% profit.
Mr Thomson added: “Based on the information received, parties agree that the losses to Tec Offshore and to Mohammed Ikram amount to £31,500 in cumulo.
“In practical terms, money left Mr Ikram and was received by the accused but was not repaid in full.”
Jailed
In mitigation, defence advocate Duncan McPhie said: “This was a simple case of embezzlement.
“Mr Kellas was using funds from Tec Offshore Ltd to repay money he had taken.”
The lawyer highlighted a social work report says a community-based sentence is available for Kellas.
Sheriff Susan Duff pointed out the social worker describes Kellas as saying he intended to repay the two men but did not view it as criminal and downplayed the impact on his victims and the company.
Mr McPhie said this was at odds with discussions he has had with his client about the matter.
Sentencing, the sheriff told Kellas she had concluded custody is unavoidable.
She said: “It is concerning the social worker found you to be of the view your conduct is not criminal and that you downplayed the impact your conduct had on your victims.
“You have expressed little or no remorse for what you did”.
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