£2.7m hot tub fraud gang jailed

Through his Staffordshire-based hot tub firm Spaserve, the 49-year-old committed fraud on an industrial scale by taking customers' money upfront only for them never to receive their home spas worth thousands of pounds.

When the firm collapsed in 2010, hundreds of customers were owed a total of £2.7 million - and they are still out of pocket.

With sales manager and co-owner Stuart Cox, 40, of Oak Way, Sutton Coldfield, he traded under a series of names online including The Trade Price Group, UK Hot Tubs, and Magic Spas.

Together they withdrew more than £1 million out of the business, with Foster living a life of luxury, including foreign holidays, an executive box at Birmingham City Football Club, and had three Porsches on the driveway of his mansion in Milford on the edge of Cannock Chase.

They conned customers to believe they were getting American-made hot tubs when in fact they were cheap Chinese models.

And alongside employee Jonathan Husselbee, 37, of High Street, Dotshill, near Tamworth, they lied about anticipated delivery dates to stop customers from cancelling their orders.

In some cases the orders were never made, Stafford Crown Court was told.

After a three month trial the trio were found guilty of fraudulent trading and conspiracy to defraud.

The court heard the firm, based in Towers Business Park, Rugeley, took between £6 million and £8million worth of orders for 2,000 hot tubs over three-and-a-half years from April 2007 to October 2010.

But only in the region of 1,600 were ever delivered.

And of those delivered customers were left angry at the substandard spas and by the fact they had been duped of the country of manufacture.

Foster took at least £900,000 from the business while Cox took in the region of £200,000 plus £100,000 in expenses.

Husselbee was paid a £35,000 annual salary plus benefits.

Prosecutor Mr Adrian Keeling QC said the firm was used as a 'cash cow'.

"It was a fraud from the word go," he said.

"The whole company structure was based upon a presumption that one third of the receipt would be profit drawn by the partnership without any analysis at all. It was dishonest and wrong."

He added: "This was a deliberate fraud and was sophisticated. It caused a £2.7 million lost which is significant.

"Foster in particular spent the money on a lavish lifestyle which was born out of greed.

"By his own admission he said that 'it's better to have lived a millionaire's lifestyle and lost it than to never have lived a millionaire's lifestyle at all'."

The jury heard that Spaserve was not the first company Foster was involved with to go bankrupt. He and his wife Katie were joint owners of a firm called Acara, which supplied hot tubs.

In 2007 Acara went in to liquidation with debts of £500,000 and assets of just £200.

At the time, the Insolvency Service was considering disqualifying Foster from being a company director, but in the end decided not to.

Jailing Foster for three-and-a-half years in jail, Cox to two-and-a-half years, and Husselbee to two years, Judge Amjad Nawaz said the operation had been a 'cynical vehicle for fraud'.

He said: "In my judgment it was a wholly dishonest venture. It was only a question of time before the balloon went up and everyone would lose their money, and regrettably that happened.

"Whilst others were losing out there was an element of self-enrichment because at that time they were still getting their money. Mr Foster was living a lavish lifestyle: a large house, three Porsches - one for work, one for his wife and one for social use - and his children had private education and foreign holidays."

More than 17,500 pages of statements and exhibits made up the case and 65 witnesses – which represented the 734 customers affected by these individuals and the business – gave evidence during the lengthy trial.

At court a handful of the trio's victims watched to see them sent down.

Kay Waterman, a horse rider from Southampton, has pursued the company for years after being swindled out of £,4,500.

She set up Friends With Claims Nationwide which brought together 160 customers who have lost £750,000 to the collapsed firm.

She said: "I'm trilled. This was a simple Ponzi scheme led by this man Simon Foster as puppet master over Cox and Husselbee . Well tonight he is in prison while we get to go home with our families and live our lives. He is a criminal and is no longer out their on the streets. I'm not sure he will ever be remorseful as he is still in denial.

"This has been our lives for the last six years. It has been tough and we've endured a hell of a lot but it is cause to celebrate."

Les Bennion, 42, form Norley in Cheshire was defrauded of £4,500.

He said: "Personally I don't think they got long enough. Like hundreds of others I have been left out of pocket and it has affected our lives hugely while he lived the high life. It is disgusting."

And Graham Wilson, 69, of Doncaster, who lost a total of £5,500, said: "I don't think the sentence is enough but I am happy to see them behind bars."

Detective Sergeant Rob Harvey, from Staffordshire Police's Fraud and Financial Investigation Unit, said: "This case highlights that fraud is not a victimless crime. It is a criminal act, and one which is motivated by greed. These three men preyed on unsuspecting members of the public by abusing their trust and callously disregarding the impact their actions would have.

"They did not care about the customers they were dealing with – they were purely motivated by securing hot tub sales and getting money."

• This article is not in any way related to the Hampshire-based firm UK Hot Tubs Ltd, based at Broadmarsh Business Centre.