Four men who conned banks into handing over £160 million for faked contracts to lay fibre optic cables in sewers have been jailed.
Stephen Dartnell, 60; George Alexander, 50; Simon Mundy, 50, and Carl Cumiskey, 56, were all convicted of the three-year scam after a five-month trial at Southwark Crown Court.
Dartnell and Alexander, working for Total Asset Finance (TAF), conspired with Cumiskey, of H2O Networks Limited, to create, sell and sign falsely inflated or entirely fabricated contracts from H2O to lenders Barclays Bank and KBC Bank.
And Mundy was paid nearly £900,000 in bribes to act as an "inside man" at KBC to authorise the loans to Warrington-based TAF.
Between 2007 and 2010 nearly £160 million in loans were secured but all money was repaid to Barclays and KBC's total losses amounted to £117 million, the court heard.
Mundy used the money to pay his mortgage, while Alexander made a personal gain of £3.1 million.
H2O's business model was to use the sewer network to install fibre optic cables and the company had offered services to councils, universities and NHS trusts, the court heard.
Two cities, Bournemouth and Dundee had even reached agreements with H2O to become so-called "fibrecities", connecting every building to its sewer network.
The fraud was eventually exposed when staff at Tendring District Council and Barclays questioned an inflated figure on a contract.
"Principal offender" Dartnell, of King's Lynn, in Norfolk, shrugged at his family in the public gallery as he was sent down for 15 years after being convicted of two counts of fraud by false representation and one charge of giving corrupt payments.
Dartnell's "right-hand man" Alexander and H2O finance director Cumiskey, who were both convicted of two counts of fraud, were jailed for 12 years and 10 years respectively.
And Mundy was handed a seven-year jail term after being convicted of one count of fraud and one of corrupt payments.
H2O's founder, Elfed Wynn Thomas, of Conwy, North Wales, was acquitted of one count of fraud and exonerated by the judge as having been unaware of the Ponzi-style scheme funding his business.
In sentencing the four men at the same court, Judge Michael Gledhill QC said: "The evidence against you is compelling.
"Not one of you has accepted dishonest involvement in these offences. Of course, you have each accepted that with hindsight that fraud was committed, but have sought to exonerate yourselves.
"One of the least attractive aspects of the case has been the attempts of each of you to blame others, including each other, for what happened."
Dartnell used most of the funds from the loans to make loans to other clients of TAF, pay Alexander commission, bribe Mundy and fund his "extravagant lifestyle".
Judge Gledhill told Dartnell, who was said to have had a successful career, that he was motivated by "sheer greed" and had corrupted Alexander and Mundy.
He said: "You, Stephen Dartnell, realised how easy it would be to defraud KBC of vast sums of money.
"All that had to be done was to alter figures of the original contract, for example by increasing the annual rentals of £10,000 to £100,000 or £1 million or more and then assign the inflated contract to KBC."
When KBC closed its UK operation in the wake of the financial crisis, Dartnell targeted Barclays.
He tried to "emasculate" the bank's investigation by repaying the £16.8 million loans after the alarm was raised by Tendring District Council about a demand from the lender to repay £1 million - a "hugely inflated" figure.
Dartnell invested large sums of money, gained from the loans, in H2O in the hope it would take off and profits would "rocket".
Had H2O succeeded as a business, the judge said: "No one would know there had ever been a fraud."
Of Alexander, of Arundel, in West Sussex, Judge Gledhill said: "You were prepared to act dishonestly for two reasons. Firstly, out of misplaced loyalty to Stephen Dartnell. But secondly, out of sheer greed."
Mundy, of Stockbridge, in Hampshire, was "bought off" after he raised questions about an early TAF application to KBC.
The judge said: "You had no hesitation deciding to sell your good character and your integrity."
He told Cumiskey, of Chester, in Cheshire: "I accept that until you were introduced to TAF, the idea of raising funds through fraud had not crossed your mind."
But while he did not benefit personally from any of the funds, he created and signed documents used to defraud the lenders.
"You worked hand-in-glove with George Alexander to defraud the banks," Judge Gledhill said.
Both Dartnell and Cumiskey were barred from being directors of a company for periods of 12 years and 10 respectively.
Copyright (c) Press Association Ltd. 2017, All Rights Reserved.