Court told businessman defrauded 31 golf clubs
A man who supplied advertising screens to 31 golf clubs throughout the UK between 2005 and 2009 was defrauding them, a jury has been told.
According to the Stratford-upon-Avon Herald, Warwick Crown Court has begun hearing a ten-week trial in which Kevin Clarke is said to have persuaded the clubs to invest in the systems that were fitted to golf buggies, with the promise of a guaranteed income from advertising on them.
Only one company paid a significant amount to advertise on them, states the prosecution, and Clarke was banned from being involved in the management of a company. He wasn’t a director of his limited company, but the prosecution has said that the man who was director was merely “a stooge”.
That company went bust, owing £5million to £6million, the jury has been told.
Clarke, 48, has pleaded not guilty to charges of contravening a disqualification undertaking, fraudulent trading, obtaining money transfers by deception, participating in a fraudulent business and fraud.
Prosecutor Martin Hurst said that between 2005 and 2009 Clarke ran two businesses, Elumina Iberica UK and GP Ads.
The first was Kevin Clarke trading as Elumina Iberica as a sole trader, and its business from 2005 was the sale of screens, which were described as being like large iPads, to golf clubs all over the country.
Mr Hurst explained that the purpose of the screens was that they would be mounted on golf buggies and would be GPS-enabled, showing the golfer exactly where they were on the course. The screens were linked to a computer in the clubhouse, which was also supplied by EIUK, together with the software.
Mr Hurst added: “He was also selling, he said, advertising to be shown on the screens, so that when the golfer was driving round, he would be bombarded with advertising.”
He said the scheme could only work if there were advertisers wanting to pay for space on the screens — but the only advertiser of substance was a company called Navman, which made sat-nav systems, and paid £12,500 to GP Ads, he added.
That resulted in losses to the clubs that had bought the screens, to the US manufacturers, and to a Chinese company that had paid Clarke for the installation of screens in China after his deal with the US company had been ended.
In 2002 Clarke was given a disqualification undertaking to the Secretary of State for Trade and Industry that he would not act as a company director or take part in the management of a company, states the paper. GP Ads was a limited company.
“Of course, Mr Clarke, who is not a stupid man, realised he could not be involved in running GP Ads Ltd, so he installed a stooge, Richard Selby, whose role to the world was to be the director,” said Mr Hurst.
“The simple fact is that Mr Selby was nothing more than a stooge. Mr Clarke persuaded him to be a director, but he was effectively a salesman on a wage.”
Clarke was importing the then cutting-edge screens, paying $2,500 each and selling them for £2,500, at a time when the pound was stronger against the dollar.
“Most of the small golf courses could not see a way to make it pay, and this is where the heart of the fraud comes. He contrived to make them an offer they could not refuse,” said Mr Hurst.
He said that involved two offers: the first was that the golf clubs could obtain the screens and equipment by a lease agreement with Shire Leasing and the Bank of Scotland, and at the same time he would offer the clubs a second contract with GP Ads, under which they would receive revenue from advertising on the screens.
More than 30 golf clubs signed up for contracts which were said to guarantee a 100 per cent return, so that the revenue from advertising would cover the whole cost of the screens, while others took up contracts offering a lower percentage.
“But the flaw was there were no advertisers interested in placing adverts on the screens.”
He added: “Eventually the scheme had to fail because there were no more courses to sign up, and no more income. It was obviously fraudulent to offer to pay tens of thousands a month when you have no real income.”
The trial continues.