Leamington Spa holiday company boss sentenced to two and a half years for fraud
When Leamington Spa holiday firm Russian Gateway went bust in 2012, its customers thought the thousands of pounds they had paid to the business were protected. They were wrong!
On Thursday 18th July 2013 Mr Alan Steel (DoB: 04/05/1970) of Willes Road Leamington Spa and trading as Russian Gateway (from the same address) was sentenced to two-and-a half years following a successful prosecution by Warwickshire County Council’s Trading Standards Service.
He was ordered to pay compensation to his victims of £41,000 and costs of £11,000. A Confiscation Order was also made for £180,562.20 (the criminal benefit).
Mr Steel was also disqualified from being a company director for 15 years.
Alan Steel, the owner of Russian Gateway, which sold package holidays in Russia and the Ukraine, had claimed his holidays were ATOL and ABTA protected and that monies were secured in a trustee account, meaning that if the company collapsed, customers would be fully compensated. This was not true!
The ATOL logos on his brochures and websites had been falsely applied.
The following false statement was made on brochures and websites: ‘Russian Gateway UK Ltd is compliant with the European Commission Directive on Package Travel, your money is kept secure until you return from your holiday ensuring repatriation should Russian Gateway go bankrupt. All of our flights, without exception are on scheduled airlines and you will always be provided with valid return air tickets and prepaid accommodation, excursion, guide and transfer vouchers so you are 100% protected in the extremely unlikely event of our insolvency.’
One consumer who asked for the companies ABTA number was given the genuine number of a different company to which Mr Steel had no links.
Her Honour Judge De Bertodano (presiding) stated that some of the victims, many of whom had lost thousands of pounds, were pensioners on limited incomes and the loss to them would have consequently been considerable.
Mr Steel had been taking money from customers and using it for his own household spending.
Mr Steel had previously pleaded guilty (at Warwickshire Justice Centre on 3rd June 2013) to five counts of fraud and one of breaching the Package Travel, Package Holidays and Package Tours Regulations 1992.
The offences related to false statements he made to customers of his company regarding the security of their monies following their bookings and false claims of ATOL and ABTA protection on the holidays booked.
In 2011 Warwickshire County Council’s Trading Standards Service began to receive complaints from Russian Gateway customers across the UK who complained that the company appeared to be unable to provide them with the holidays they had paid for in full.
At the same time, the Civil Aviation Authority (CAA) made Warwickshire Trading Standards aware that Russian Gateway was trading without an Air Transport Operators Licence (ATOL). The ATOL is a bond that protects customers if a travel firm or airline goes bust and all tour operators that offer package holidays by air must have one.
Despite this, Russian Gateway UK Ltd continued to take bookings and payments from customers, knowing that their money was not secure.
The CAA took legal action and in April 2012 Russian Gateway UK Ltd pleaded guilty and was fined £2000. Three customers were awarded compensation totalling £12,944 but the consumers did not receive their compensation and the business went in to liquidation.
After going into liquidation Mr Steel continued to trade and took further monies from unsuspecting consumer’s when he was in no position to supply the holidays and further failed to bond this money as required by the Package Travel, Package Holidays and Package Tours Regulations 1992.
Warwickshire Trading Standards Service, which had also been dealing with complaints decided to take legal action against Mr Steel himself leading to his successful prosecution for fraud.
Warwickshire County Councillor Les Caborn, Portfolio Holder for Community Safety said:
“Consumers should be able to buy their package holidays confident in the knowledge that their money is protected if things go wrong.”
“We will continue to take action against the very small number of irresponsible businesses who seek to defraud their customers, helping to protect consumers and safeguard the integrity of the travel industry and the legitimate businesses that operate within it.”
If you have a problem with you holiday and need consumer advice please contact Warwickshire Trading Standards via their frontline consumer advice service, the Citizens Advice Consumer Service on 08454 04 05 06 or 0208 1850 710 (English language).
For more consumer holiday advice, visit our website: www.warwickshire.gov.uk/tradingstandards
Note to Editors
1. Quinton Newcomb represented Warwickshire County Council
2. Nick Devine represented Mr Steel
3. The Citizens Advice consumer service provides free, confidential and impartial advice on consumer issues. Visit www.adviceguide.org.uk or call the Citizens Advice consumer helpline on 08454 04 05 06 or 0208 1850 710(English language).
For further information please contact:
Trading Standards Officer
Warwickshire Trading Standards Service
Warwickshire County Council
Old Budbrooke Road Warwick CV35 7DP
Tel: 01926 414039
Mob: 07771 975570
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