Did Theresa May's help get a convicted US criminal £600,000 of public money for a business loan?
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Version 0 of 1. Theresa May is embroiled in an embarrassing controversy over how a convicted criminal obtained a £500,000 government-backed loan for a business in her Berkshire constituency that has now gone bust, amid suspicions of financial misconduct. The Home Secretary has admitted that she lobbied various bodies on behalf of Charles Henry Mogford, a Land Rover dealer in Maidenhead. Mogford, 52, wanted a substantial bank loan for his business, Auto Ex Limited, after it was relocated to make way for a high-speed rail link. The salesman had achieved some fame locally from supplying specially modified Land Rovers for the 2012 James Bond film Skyfall. When the Home Secretary agreed to raise his case, she was not aware that her constituent had been sentenced to 10 years in prison in the US after pleading guilty to multiple counts of grand theft and theft of state funds, involving a Florida luxury-boat business. Ms May’s failure to carry out adequate checks before lending her support to Mogford could damage her chances of leading the Conservative Party. Ms May, who many see as a front-runner if David Cameron resigns or is forced to stand down after the election, has defined her time at the Home Office as tough on crime, and this lack of simple scrutiny will be capitalised on by her rivals and critics. A Florida Department of Corrections photo of Charles Mogford Mogford isn’t the sort of businessman the coalition government had in mind when it created the Enterprise Finance Guarantee (EFG) scheme during the credit crunch to help viable small companies not eligible for commercial loans due to a lack of security or track record. High-street banks are responsible for vetting EFG applications, but demanded the taxpayer underwrite 75 per cent of a loan if a business could not pay or went bust. In June 2013, Barclays Bank made a £580,000 EFG loan to Auto Ex. Fifteen months later, the firm was put into administration. Mogford said he did not believe it was necessary to tell Ms May about his conviction, but “Barclays were told”. He added: “Our independent bookkeepers and accountants all knew. It was not a secret.” Barclays refused to say whether it knew about Mogford’s past before giving the loan. “We always carry out the appropriate checks before approving finance, meeting both the spirit and the letter of regulation.” A simple Google search reveals Mogford’s prison record and photograph and a 2008 US court judgment refusing to reduce his sentence. Mogford served almost six years. Shortly after his release he returned to the UK and set up Auto Ex in March 2009. The firm, trading as Berkshire Land Rover, went bust last September, owing over £1m to more than 120 businesses and individuals, some of them in Ms May’s constituency. Also, HM Revenue & Customs must write off £528,000 in unpaid VAT and corporation tax. It is understood officials last year arrested Mogford on an unrelated matter. According to documents filed at Companies House by Begbies Traynor, Auto Ex’s administrators, creditors will not receive a penny. Mogford told the administrators he needed the EFG loan to cover £450,000 in unexpected costs after the relocation of his business in early 2012 to make way for the Government’s Crossrail link from Reading to Essex. He said he asked Ms May for help with compensation from the developers. But the administrators noted another explanation for Mogford’s cash flow crisis was the loss of £300,000 in two other failed firms. Last month, angry creditors bankrupted Mogford, and the administrators have formally reported him to the regulator over concerns on how he ran Auto Ex and his fitness to be a director. Government investigators from the Insolvency Service’s Disqualification Unit are likely to act on the administrators’ report and may also look into the financial information supplied to Barclays. Charles Henry Mogford achieved local fame locally from supplying specially modified Land Rovers for the 2012 James Bond film Skyfall (AP) More than 23,000 firms have taken £2.44bn in EFG loans, according to the department of Business, Innovation & Skills (BIS). Around 4,500 firms have defaulted at a cost of £160m. However, the amount paid back to banks under the taxpayer guarantee is commercially confidential, said a BIS spokesperson. Barclays provided £329m in EFG loans. It said yesterday: “Although we never comment on individual cases or security matters, we can confirm that no claim will be made against the [EFG] scheme in this case.” A spokesperson for Ms May said: “Mr Mogford approached Mrs May to ask for her assistance as his constituency MP. His concerns included the Crossrail development in Maidenhead and the problems small businesses were experiencing in respect of bank lending. Mrs May raised these concerns, where appropriate, as she would do for any constituent or local business. Mrs May did not at any stage provide any assistance to Mr Mogford in obtaining any kind of loan, either via the EFG or any other scheme.” However, the spokesperson declined to identify which official bodies Ms May had contacted on Mogford’s behalf, or release the correspondence file for independent inspection. |