Men jailed for £1.8m housing association scam
Six housing association employees have been jailed for a multi-million scam where they took public money by falsely claiming to house asylum seekers.
The defendants from Astonbrook Housing Association last week pleaded guilty to fraudulently taking millions of pounds from the UK Border Agency and Birmingham Council.
Instead of using the money to house asylum seekers they stole the cash, making out cheques to themselves that appeared to be payments for legitimate goods and services. They then laundered the money through various companies and by buying houses, with much of the cash they received going to bank accounts in Dubai.
‘Now that criminal proceedings are concluded, we will look at any outstanding regulatory issues relating to our inquiry and publish a report once it is completed.’
Michelle Russell, Charity Commission
Mohammed Arwo, 54, of Waldrons Moor, Kings Heath, who ran the housing association, was sentenced at Birmingham Crown Court on Friday last week to four-and-a-half years in jail and disqualified from being a director of a company for 10 years.
He and Abdillahi Musa Abdi – 55, of Greenway Street, Bordesley Green, also sentenced to four-and-a-half years in prison and disqualified from being a director of a company for 10 years – were trustees of the housing association and were barred from becoming charity trustees in the future.
The Charity Commission started a statutory inquiry in May 2007 after police became concerned about the charity and 70 officers raided the housing association in Moseley Road in July that year.
The commission appointed two interim managers and in March 2009 the charity went into liquidation and the managers were appointed as liquidators to wind down the charity, a process which is still on-going.
Michelle Russell, head of investigations and enforcement at the Charity Commission, said using a charity for criminal purposes was ‘absolutely abhorrent’.
‘The public put their trust in those who are in charge of charities to ensure vital services are provided to those who most need them and that money given to charity is used only for those purposes,’ she said.
‘Charity trustees have responsibilities to ensure this is the case and to act in the best interests of the charity. Now that criminal proceedings are concluded, we will look at any outstanding regulatory issues relating to our inquiry and publish a report once it is completed.’
The police are now using the Proceeds of Crime Act to recover any assets and return them as compensation to victims including to the taxpayer through the UKBA and Birmingham Council.
A dedicated team of three full-time officers and specialist investigators worked for five years to examine 18,000 cheques and fraudulent invoices.
Astonbrook Housing Association acquired 20 properties in Birmingham to secure funding to house asylum seekers and then sent more than £1 million of public cash overseas via two companies.
The defendants were charged with stealing and laundering £1.8 million but police believe that the true total of the public funds defrauded could be up to £6 million.
The other four men who admitted to money laundering were:
- Hamud Yassin, aged 60, of Valley Gardens, Wembley, London sentenced to two-and-a-half years in prison and disqualified from being a director of a company for ten years
- Kaise Ismail, aged 38, of Stoneleigh Road, Perry Barr sentenced to two-and-a-half years in prison and disqualified from being a director of a company for ten years
- Mustafe Arwo, aged 43, of Gaddesby Road, Perry Barr sentenced to two years in prison and disqualified from being a director of a company for seven years
- Abdiwahab Said, aged 35-years, of Gaddesby Road, Kings Heath sentenced to 15 months in prison and disqualified from being a director of a company for seven years.
Sergeant Emma Hickl, from West Midlands Police’s economic crime unit, said: ‘Not one of them has shown any remorse for their abuse of public funds and throughout this investigation all six have done everything in their power to prevent the fraud being uncovered and to evade culpability.’
A UKBA spokesperson said: ‘We take our duty of care towards those housed in accommodation provided on behalf of the UK Border Agency extremely seriously.
‘The sentences handed down send a message that those looking to exploit asylum seekers and defraud the taxpayer will be caught and brought before the courts.’
A spokesperson for Birmingham Council said since this case all potential Supporting People providers were subject to rigorous tests and performance was monitored on a monthly basis.