Wednesday, May 30, 2007
Exeter's Former Chairman Gets Prison Term
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Mail
Mail - Businessman jailed for Grecians fraud
A "broke" businessman who took over Exeter City after lying about his personal wealth was today jailed for 21 months for fraud.
John Russell, 51, claimed he had substantial funds to invest in The Grecians before he was appointed chairman in May 2002.
In reality, the club's new saviour had no cash and no assets to plough into the Devon club, who were already severely in debt, a court heard.
Russell and his deputy, Michael Lewis, desperately attempted to keep the club going despite going further into the red during their first and only season in charge.
Debts went unpaid, cheques bounced and money ringfenced for the club's academy and community projects were illegally transferred by the club, Bristol Crown Court was told.
The two men continued trading despite knowing the club was insolvent and unable to repay loans.
Russell, of Cannon Hall Close, Brighouse, West Yorkshire, pleaded guilty to fraudulent trading and obtaining a pecuniary advantage by deception.
Lewis, 65, of Loughor Road, Gorseinon, Swansea, also admitted fraudulent trading, but was sentenced to 200 hours of community work after the judge accepted he played a lesser role in the scam.
In sentencing Russell, Judge David Ticehurst told him that he had betrayed the club's football fans and treated it as his own personal domain.
"You wanted to be the club's financial saviour or white knight even though you knew that was quite impossible," he said.
"The deception could be seen in your conduct at the club when you sent personal guarantees knowing you did not have the financial means to meet them."
The court heard the two men took over the club in May 2002.
Russell was to provide the much-needed financial investment and commercial know-how, while Lewis, the former chairman of Swansea, was the "football man" who would use his contacts and expertise to help the club.
But the new regime was built on a lie.
Russell, who left the same position at Scarborough after the Yorkshire club went into administration, had claimed he owned a hotel, property and businesses which would help transform the club's fortunes.
Paul Dunkels, prosecuting, said: "He was broke. He had no assets, no money and no bank account and certainly had no money to invest in Exeter City."
Russell offered his directors generous personal guarantees over existing debts and liabilities, which were in fact "worthless", the court heard.
Russell effectively dispensed with board meetings, as the other directors were sidelined.
Cheques began bouncing, loans were not being repaid and creditors were soon getting nervous, the court heard.
Russell and Lewis continued to offer assurances that everything was fine and appeared to ignore a series of warnings about the club's impending insolvency.
The court were told they moved money from accounts to buy themselves time and told banks that money would be deposited within hours, but never materialised.
During their ill-fated period in charge, pop superstar Michael Jackson was made an honorary director of the club, and visited the club's St James Park with his friend Uri Geller, who was appointed vice-chairman.
But even that proved a failure as the PR events made a loss.
Russell admitted that by September 2002 he realised the club was insolvent and was now trading illegally. Lewis, who previously worked at Spurs, Reading and Cardiff, claimed he was only aware of the club's dire financial position in March 2003.
Despite the mounting debts, both men paid themselves "expenses" and generous consultancy fees, while Mr Russell's wife Gillian was one of the few creditors to be paid back.
Both men also charged the club for their rents and even found positions for their family at the business. Lewis later told police that "half the clubs" in the football league were trading illegally after going bust.
Both men blamed the previous regime for the club's position and said it was effectively bankrupt when they took it over.
When asked by police what he had brought to the club, Russell told them: "Expertise."
The court heard the men left Exeter £4.5million in debt and on the brink of extinction.
The supporters' trust took over the club and agreed to pay back 7p in the pound to creditors, leaving dozens of businesses and individuals hundreds of thousands of pounds out of pocket.
Russell had previously been convicted of two counts of obtaining money by deception at Bradford Crown Court in 1999, and was given a 15-month sentence - suspended for two years.
Derek Duffy, defending, said the former footballer had "deluded" himself he could save the club, but had never attempt to gain from his involvement at Exeter.
He said he may have been guilty of being "too ambitious" and said he had tried to sign Paul Gascoigne to the club.
Duffy said: "We accept Mr Russell acted dishonestly, the reason for that dishonesty was not to benefit himself but in the mistaken belief that if he had got to the end of the season, Exeter could have been saved.
He added: "He doesn't deserve to go to prison for living the dream."
Exeter ended the season being relegated to the Conference.
Speaking after the day-long sentencing, Lewis said: "It's taken a toll on both of us. I'm just shocked at the sentence John has received.
"I think many football clubs will be thinking 'there for the grace of God'."
Neil Le Milliere, 53, who now sits on the Exeter board, said the fans were pleased with the sentence.
"Hopefully this will send out a message to anyone thinking of doing something similar not to.
"We were very close to the brink. The supporters' trust put three directors in place, who took no money and expenses, and they brought (the club) back from the brink of extinction." Daily Mail
Mail - Businessman jailed for Grecians fraud
A "broke" businessman who took over Exeter City after lying about his personal wealth was today jailed for 21 months for fraud.
John Russell, 51, claimed he had substantial funds to invest in The Grecians before he was appointed chairman in May 2002.
In reality, the club's new saviour had no cash and no assets to plough into the Devon club, who were already severely in debt, a court heard.
Russell and his deputy, Michael Lewis, desperately attempted to keep the club going despite going further into the red during their first and only season in charge.
Debts went unpaid, cheques bounced and money ringfenced for the club's academy and community projects were illegally transferred by the club, Bristol Crown Court was told.
The two men continued trading despite knowing the club was insolvent and unable to repay loans.
Russell, of Cannon Hall Close, Brighouse, West Yorkshire, pleaded guilty to fraudulent trading and obtaining a pecuniary advantage by deception.
Lewis, 65, of Loughor Road, Gorseinon, Swansea, also admitted fraudulent trading, but was sentenced to 200 hours of community work after the judge accepted he played a lesser role in the scam.
In sentencing Russell, Judge David Ticehurst told him that he had betrayed the club's football fans and treated it as his own personal domain.
"You wanted to be the club's financial saviour or white knight even though you knew that was quite impossible," he said.
"The deception could be seen in your conduct at the club when you sent personal guarantees knowing you did not have the financial means to meet them."
The court heard the two men took over the club in May 2002.
Russell was to provide the much-needed financial investment and commercial know-how, while Lewis, the former chairman of Swansea, was the "football man" who would use his contacts and expertise to help the club.
But the new regime was built on a lie.
Russell, who left the same position at Scarborough after the Yorkshire club went into administration, had claimed he owned a hotel, property and businesses which would help transform the club's fortunes.
Paul Dunkels, prosecuting, said: "He was broke. He had no assets, no money and no bank account and certainly had no money to invest in Exeter City."
Russell offered his directors generous personal guarantees over existing debts and liabilities, which were in fact "worthless", the court heard.
Russell effectively dispensed with board meetings, as the other directors were sidelined.
Cheques began bouncing, loans were not being repaid and creditors were soon getting nervous, the court heard.
Russell and Lewis continued to offer assurances that everything was fine and appeared to ignore a series of warnings about the club's impending insolvency.
The court were told they moved money from accounts to buy themselves time and told banks that money would be deposited within hours, but never materialised.
During their ill-fated period in charge, pop superstar Michael Jackson was made an honorary director of the club, and visited the club's St James Park with his friend Uri Geller, who was appointed vice-chairman.
But even that proved a failure as the PR events made a loss.
Russell admitted that by September 2002 he realised the club was insolvent and was now trading illegally. Lewis, who previously worked at Spurs, Reading and Cardiff, claimed he was only aware of the club's dire financial position in March 2003.
Despite the mounting debts, both men paid themselves "expenses" and generous consultancy fees, while Mr Russell's wife Gillian was one of the few creditors to be paid back.
Both men also charged the club for their rents and even found positions for their family at the business. Lewis later told police that "half the clubs" in the football league were trading illegally after going bust.
Both men blamed the previous regime for the club's position and said it was effectively bankrupt when they took it over.
When asked by police what he had brought to the club, Russell told them: "Expertise."
The court heard the men left Exeter £4.5million in debt and on the brink of extinction.
The supporters' trust took over the club and agreed to pay back 7p in the pound to creditors, leaving dozens of businesses and individuals hundreds of thousands of pounds out of pocket.
Russell had previously been convicted of two counts of obtaining money by deception at Bradford Crown Court in 1999, and was given a 15-month sentence - suspended for two years.
Derek Duffy, defending, said the former footballer had "deluded" himself he could save the club, but had never attempt to gain from his involvement at Exeter.
He said he may have been guilty of being "too ambitious" and said he had tried to sign Paul Gascoigne to the club.
Duffy said: "We accept Mr Russell acted dishonestly, the reason for that dishonesty was not to benefit himself but in the mistaken belief that if he had got to the end of the season, Exeter could have been saved.
He added: "He doesn't deserve to go to prison for living the dream."
Exeter ended the season being relegated to the Conference.
Speaking after the day-long sentencing, Lewis said: "It's taken a toll on both of us. I'm just shocked at the sentence John has received.
"I think many football clubs will be thinking 'there for the grace of God'."
Neil Le Milliere, 53, who now sits on the Exeter board, said the fans were pleased with the sentence.
"Hopefully this will send out a message to anyone thinking of doing something similar not to.
"We were very close to the brink. The supporters' trust put three directors in place, who took no money and expenses, and they brought (the club) back from the brink of extinction." Daily Mail
