Classic Caravans Ltd, based at Heath Farm, North Rauceby, went into voluntary liquidation in October 2012 leaving behind debts of more than £200,000.
Andrew Evans, prosecuting, said the company owned caravans which could have cleared the debts but a fake document was drawn up falsely showing that the caravans belonged to Scottish businessman Liberty Durant.
At the time Durant was illegally involved in running the firm.
The court was told that Durant should not have played any part in the management of Classic Caravans Ltd as he was the subject of a six year disqualification from being a company director after signing a voluntary agreement with the authorities.
Mr Evans said: “This case arises out of an investigation undertaken by the insolvency services in relation to the liquidation of Classic Caravans Ltd. Durant was the sole shareholder and owner.”
Durant was originally a director of the company but resigned in 2011 after an application by the Secretary of State to disqualify him from being a director because of misconduct relating to Thistle Park Homes Ltd. Durant then agreed to a six year disqualification on acting as a director or being involved in the management of any company.
Mr Evans said that Durant continued to run Classic Caravans in defiance of the ban and installed Joseph Price as a director.
The company eventually went into liquidation but during investigations which followed an insolvency specialist appointed by the liquidators visited the company premises and found a number of caravans on the site.
Mr Evans said: “He was told they belonged to Durant who had stumped up £240,000 for them. There was no mention of this in any documents.
“Had the investigator been informed that these caravans belonged to the company he would not have advised that the company had no assets and should go into liquidation. Instead he would have advised that the debts the company owed could be met by the sale of some of that stock. The existence of that stock was deliberately concealed from the liquidators.”
Mr Evans said that a back-dated document was later drawn up by disgraced solicitor Alan Borland purporting to show the caravans, which the prosecution estimated as valued at £500,000, had been sold to Durant before the liquidation was entered into.
Borland, who had previously been struck off as a solicitor and jailed for stealing clients’ funds, realised the fake document contained glaring errors and went on to produce a second document, but that was rejected by the liquidators, the court was told.
Durant, 70, of Bothwell, Glasgow; Price, 54, of Rider Gardens, Fishtoft; and Borland, 66, who gave a company address in Alresford, Hampshire, each admitted a charge of fraud by false representation on or about November 26, 2012 in relation to the false document.
Durant also admitted acting as a director between November 2011 and September 2013 while disqualified.
Durant was given a two year jail sentence suspended for two years and disqualified from being a director for 10 years. Price was given a 16 month jail sentence suspended for two years and disqualified as a director for six years. Borland was given a 12 month jail sentence suspended for two years and disqualified as a director for five years.
Each of the three men were ordered to pay £1,000 towards prosecution costs.
Judge Andrew Easteal told the three men: “The criminality was cynical, deliberate, calculated and very, very poorly executed.”
James Beck, for Durant, said that much of the company’s debt was owed to himself.
He said Durant has been made bankrupt and has lost everything.
“This whole business has destroyed his health.
“He is now dependent on his old age pension. He has no assets left.”
Nicola Hornby, for Price, said he has lost his good character as he had no previous convictions.
She said that since the offence occured he had suffered traumatic circumstances in his life and has been unable to continue in business.
James Bourne-Arton, for Borland, urged that he should not be disqualified as a director as it would have an impact on his current business.
“He finds himself at the age of 66 with no pension and no savings. He is going to have to continue to work. That is necessary for him to survive financially.”