Hotelier who pocketed almost £500,000 in employee tax contributions is jailed

A hotelier who pocketed almost £500,000 of his employees’ PAYE and National Insurance contributions has been jailed for three years.

 

Michael Stainer, 74, was sentenced yesterday (Thursday 7 July) after being convicted by a jury at Southwark Crown Court of two counts of cheating the public revenue and one of fraud by false representation.

 

The court heard he had targeted 50 employees at the Grand in Folkestone, Kent.

 

Judge Gregory Perins told the chartered accountant: “Many, if not all, of your employees were on low or minimum wage and you were ultimately responsible for paying these wages and deducting PAYE and National Insurance.

 

“However, you took the calculated decision not to do that and, although you deducted the amount of PAYE and National Insurance, you did not pass that money on and instead kept it.”

 

Over four years Stainer pocketed just over £473,000. He told the court his motive had been to ensure employees could be kept in their jobs; however the judge said this argument had been “plainly rejected” by the jury.

 

The court had been told that Stainer paid most of the money into his wife's personal bank account and used it to pay off mortgages on apartments the couple owned on the Grand’s land.

 

It was said that when questioned by investigators he claimed not to employ any staff, used different company names to avoid liability, and adjusted settings on company accounts software to conceal his actions.

 

Perins added: “Also clear to me is that you did not think about the impact your actions were potentially having on your employees.

 

“They all assumed their PAYE and National Insurance was being paid and it put each of them at significant risk of a large tax liability once the cheat was uncovered, as well as putting their state pensions at risk.

 

“Fortunately, revenue has taken the decision to proceed on the basis that the tax was paid so none of them are at a financial disadvantage, but you did not know this at the time of the cheat and you took an obvious risk with their financial security to keep your business afloat.

 

“Numerous notifications meant you were well aware that revenue was chasing you for the money and each time you received a notice, you openly sought to argue that revenue had made a mistake and they had identified the wrong company.”

 

He added: “You knew that the Grand was in poor shape financially, and you kept doing all you could to keep revenue at arm’s length instead of accepting the reality of your situation.”

 

Mukul Chawla QC, mitigating on behalf of Steiner, said he had not profited personally from the crime and had been of previous good character.

 

Stainer was jailed for three years and disqualified from acting as a company director for the same period.

 

His wife, Doris Stainer, 60, stood trial alongside him but was cleared by a jury after insisting she had no idea what her husband was up to.