A County Durham builder defrauded customers out of over £110,000 and gambled away some of the money.
Stephen Loughlen took thousands from customers across the North East in exchange for incomplete and shoddy work in 2018 and 2019. The 55-year-old, who operated as sole director of Newcastle Facilities and Management, pleaded guilty to three counts of fraud and appeared at Durham Crown Court on Monday to be sentenced.
Loughlen, of Sunset View, Flint Hill, near Stanley, also pleaded guilty to the charges - which related to three separate customers - on behalf of his company at a previous hearing.
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Philip Morley, prosecuting, said the first customer Loughlen defrauded was a mum who was due to give birth and had asked him to carry out a building project. "The price of the work given was £57,785 and the defendant set up a payment summary. The victim started making those payments", he said.
"The defendant continued to ask for more money to assist with cash flow, and by May 2018 the money spent was near £42,000. He continued asking for money and continued to suggest he was spending money on items for the build and the victim continued to pay him."
Loughlen continued requesting money and the price of the project went up, and by July the complete project price had almost been paid by the victim. But the building work had slowed down by this point.
"The work was sporadic", Mr Morley said, "no one attended on site and limited work was done. The defendant made numerous excuses saying it was too wet or windy."
Despite the work slowing down, Loughlen still suggested to the victim that a remaining £17,000 still had to be paid. By February 2019, the project was in such "poor state" the local authority handed the victim a notice that repair work and removal of rubbish had to take place.
Mr Morley said that by March 2019, with £61,000 being paid, Loughlen continued to say building items were in storage and that the work would be completed. It was then that the victim cut ties with him.
A chartered surveyor examined the build and determined that £14,000 worth or work had actually been completed. The court was told that throughout the period of the project "a significant amount of money - £23,000 - had been spent on gambling".
The court heard that Loughlen went on to defraud two more customers out of thousands in the same way - one of which was also a mother who said that live wires had been left exposed in the toddler's bedroom. Plaster was also "falling from the ceiling".
Matthew Hopkins, defending, said Loughlen was of "good character". "He has worked in the building trade his entire life, all that time there has never been any suggestion of any fraudulent behaviour on his part before the offences", he said.
"He spent long periods of time with employers like Balfour Beatty, in all that time he was regarded as a dependable employee. He did do work for all of the victims, the total value of work was just under £60,000. This is not a case of somebody who has taken money and never completed work or did it at a bad standard."
He added: "He's a man who's developed a gambling habit...he was losing more money than he was bringing in. He made the situation worse for himself as he took more work on. He's not a cartoon villain who set out to scam people out of money. He was in an increasingly desperate situation and has been trying to raise the funds."
The court was told that Loughlen had since tried to raise money to pay back to the victims by selling items at auction, but Judge Ray Singh said the amount was a "pittance". The judge jailed Loughlen for three years and disqualified him from acting as a company director for five years. A confiscation hearing will also be held on August 1.
