A dealer in retail properties has been jailed for three years for defrauding investors in deals exceeding £1.3m.
Shaun Kiely, director and shareholder of property development business Sky Properties (Northern) Limited (SPN) and retail outlet chain S-Mart Stores Plc, has also been disqualified from being a director for seven years for defrauding seven investors.
Kiely deceived investors in 2005 by promoting the S-Mart stores as profitable businesses when very little trading was actually being done.
Before and during 2005, SPN purchased over 50 low value commercial retail properties across the country and created 20-year commercial leases to S-Mart for the properties before selling on the freeholds at auction.
The properties were promoted as a chance to invest in a 'going concern', but S-Mart was not a profitable business.
Rather than running S-Mart as a retail company long term, Kiely intended to make quick short-term profits by selling the freeholds on to buyers unaware the properties were leased by a company whose turnover was too low to cover its rental obligations.
He was found guilty at Preston Crown Court in May 2011 of obtaining money transfers by deception and of false accounting.
Sentencing Kiely on Monday, HHJ Gibson told the defendant: "The sign of your calculation was that at first sign of failure, rather than improve trade by investing money, you walked away."
SFO director Richard Alderman said: "Shaun Kiely abused the trust of the people who invested in his business. They expected a return for their money, but all they got was worry and distress. I am very pleased that justice has now been served"
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