Dawn raids lead to arrests in #163;1.6m fraud case

25th May 2012 at 01:00
Football apprenticeship firm is under investigation for forgery

Three men have been arrested in an investigation into a suspected pound;1.6 million fraud at a football apprenticeship company run by former professional players.

More than 70 police officers from the Serious Fraud Office and four local forces raided four houses and an office building as part of their inquiry into Luis Michael Training (LMT), a company established by former Charlton Athletic and Wales defender Mark Aizlewood with ex-Middlesbrough striker Paul Sugrue.

Police arrested three men in the dawn raids last week: a 29-year-old in Manchester, a 51-year-old in Cardiff and a 52-year-old in Chepstow. All the men, whom police declined to name, were released on unconditional bail.

The Serious Fraud Office said LMT was suspected of producing false documents, including registration papers, progress reviews and coaching exam certificates, to falsely demonstrate to colleges and exam boards that students had successfully completed apprenticeships.

Police believe that the fraudulent claims to colleges for Skills Funding Agency cash, which were made from 2009 until the company went bankrupt in 2011, total more than pound;1.6 million. "It is believed that LMT fraudulently overstated the number of students and apprenticeships that they had placed. The suspected offences include fraudulent trading, false accounting and forgery," the Serious Fraud Office said in a statement.

LMT accumulated contracts for up to pound;6 million of training for about 2,000 people in the two years after it was founded in 2009. According to LMT's accounts for 2010, fees of pound;133,257 were charged to the company by a consultancy wholly owned by Mr Aizlewood, while Mr Sugrue's consultancy billed the company for pound;180,390.

The company built credibility on claims of connections with former football stars such as Ian Rush, quoted on its website: "I myself have recommended the NVQs and apprenticeships Luis Michael offer to a number of people - all of whom have found them informative and enjoyable." There is no suggestion that Mr Rush was aware of the alleged fraud, however.

Doubts over the company's subcontracting deals with colleges were first reported in TES in May last year, when it was revealed that Sparsholt College in Hampshire had axed a pound;4.2 million contract with the company over alleged "irregularities". Barnet College and South Thames College were also among those to terminate deals with LMT.

Sparsholt, which had 1,189 apprentices employed at football clubs from League One's Sheffield Wednesday to Conference side Redditch United, cited "perceived irregularities" as its reason for ending the deal. But a spokesman for LMT at the time denied any wrongdoing and said that the company was considering legal action against the colleges.

The collapse of the deals between colleges and LMT prompted concerns at the Skills Funding Agency about the level of subcontracting occurring in FE during the rapid shift of funding from Train to Gain to apprenticeships. Since then, the agency has begun publishing lists of subcontractors responsible for provision worth more than pound;100,000, marking a significant change of direction, since the funding body had hoped to delegate responsibility for all contracts of less than pound;500,000 to large training providers and colleges in order to save on administration costs.

The list, published earlier this year, revealed that more than a tenth of the agency's pound;4 billion budget was spent on subcontracting.

Putting the boot in

- Fifty-two Serious Fraud Office investigators and 20 police officers carried out the raids.

- They searched business premises in Southport and homes in Cardiff, Chepstow, Manchester.

- Three men, aged 29, 51 and 52, were arrested on suspicion of fraudulent trading, false accounting and forgery. They were later released on unconditional bail.

- The Serious Fraud Office has been investigating the case since September 2011.

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