Director receives ten year ban after £4 million false invoice scheme - PKF Francis Clark
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Director receives ten year ban after £4 million false invoice scheme

The Director of a financing company has received a ten year ban after heading a false invoice scheme to secure £4 million of illegitimate funds.

David Andrew Marsden (62), from Exeter, was the director of finance company First Capital Factors Limited (FCF). Incorporated in 2009, FCF offered recourse factoring facilities for small and medium businesses where they would buy a company’s invoices to provide them with advanced finance.

To be able to purchase their clients’ invoices, FCF secured funding from other companies. However, one of FCF’s funders spotted irregularities within FCF’s portfolio and sought advice from a business advisory firm in August 2016, who agreed that there were concerns within FCF’s loan book.

The funder used its statutory right as a fixed charge holder to appoint an administrator and following further enquiries, it was discovered that David Marsden instructed a number of his clients to produce false invoices before he submitted them to FCF’s funders to secure funds.

FCF operated a back-to-back receivables finance facility, where FCF would assign debts to the funder in exchange for 65% funding. Using this method, David Marsden fraudulently secured close to £4.3 million before transferring money from FCF to other companies he was connected with in order to avoid paying his creditors.

On 18 September 2018, the Secretary of State accepted a disqualification undertaking from David Andrew Marsden after he admitted acting in collusion with certain clients to defraud a back to back receivables finance provider.

Effective from 9 October 2018, David Andrew Marsden is now banned for ten years from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

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