Developing world clothing exporter accused of £200k fraud

Wednesday 25 September 2019

An ex-businesswoman “cheated” people in developing countries out of thousands by selling them batches of second-hand clothing that never turned up, the Royal Court heard on the first day of her £200,000 fraud trial.

The accusation against Lincolnshire-born Michelle Yuksel, who denies nine charges of fraudulent activity, came from Crown Advocate Simon Thomas.

Outlining the case for the prosecution yesterday, Crown Advocate Thomas alleged that Ms Yuksel took “very large deposits” from her customers to fulfil an order for used clothes, before using the money to fund business or personal overheads and liabilities over a lengthy period.

Pictured: Ms Yuksel's trial is taking place in the Royal Court.

He said, in most cases, customers received no goods at all, while others received their goods after “very long delays couples with excuses” and found the stock to be substandard.

The jury of four women and eight men heard that Ms Yuksel - who is represented by Advocate Ian Jones - ran a number of businesses, including Parisma Limited, Parisma Textiles Recycling Channel Islands and Logistics2Go.

Although she started buying and selling fashion accessories on eBay, she then moved on to sourcing second-hand clothes in bulk and selling them to customers - a number of which were from developing countries.

Most of the customers involved in the trial had placed orders for used clothes with Ms Yuksel to sell them in Africa. Some of them were acting on behalf of charities, while others had to take out “substantial bank loans” to pay deposits to Ms Yuksel.

“Almost all of them could not afford to lose the money,” the Crown Advocate said.

Pictured: Crown Advocate Simon Thomas.

“The defendant may well have taken the view that the 'foreigners' who she cheated were too far away to do anything about it,” he added.

The Crown Advocate said Ms Yuksel’s business didn’t suddenly fall into financial problems. Instead, the jury heard that it had experienced financial difficulties from May 2008, as evidenced by the minutes of the company’s board meetings.

The situation was such that Ms Yuksel’s parents, who had provided a total of £200,000 to the business, resigned as Directors and refused to give any more money the following year.

“It is clear from the length of time that the Defendant’s fraudulent activity went on that her financial difficulties were longstanding,” Crown Advocate Thomas continued. 

“Nor is this a case of the Defendant defrauding customers in order to live a lavish lifestyle. The Defendant seems to have lived a hand-to-mouth existence. Rather it is a case of defrauding people to keep her business afloat when the honest course would have been to shut it down.”

Pictured: Advocate Ian Jones is defending Ms Yuksel.

The jury also heard that Parisma’s customers were offered discounts if they made advance payments on their orders. Ms Yuksel told Police that her business worked on the basis of getting the money in and then processing the order. 

But what happened was different, the Crown Advocate explained: “The advance payments they made were swallowed up by Parisma’s debts and frittered away on the defendant’s domestic expenses instead of being used to fund the stock purchases for the customers’ orders.”

While Ms Yuksel had several employees - some of which she struggled to pay - the Crown Advocate said she kept “overall control” of the business and was the only one with access to a Lincoln-based bank account into which customers paid money.

“She maintained financial control over the relevant bank accounts, and it was she who converted customers’ money dishonestly by spending their money on business and personal expenses, those customers never receiving the goods that they had ordered,” the Crown Advocate said, later explaining that such business expenses included staff wages, electricity bills and rent.

He went on to explain how customers experienced delays in receiving their orders between 2010 and 2013, with Ms Yuksel allegedly pretending that the goods had been despatched when they had not, and blaming shipping companies and weather for the delays.

Pictured: Ms Yuksel allegedly blamed delivery delays on shipping companies and the weather.

In one instance, she was even said to have claimed that a container of goods had gone missing altogether, and offered another one "in compensation".

One client in Ghana was described as having been given a "series of lies and excuses, but not the goods that he ordered".

"...Telling the truth was not something that the defendant was particularly troubled about," the Crown Advocate commented.

He further explained how some customers requested to inspect the goods they had ordered in advance, but that Ms Yuksel would only show them a small sample of items, while explaining she was in the process of purchasing another warehouse.

The jury were also told of a pair of friends who each ran companies in Kenya, who did not receive any goods until as much as a year after paying their deposit. When the container finally arrived, one of the clients described the shoes within as "worn out, damp and smelly" and even "rotten".

While Ms Yuksel agreed to refund £20,000 to one of them, she only paid the first £1,000.

Pictured: Ms Yuksel said she would refund one customer after they received a shipment of "rotten" shoes.

Other clients demanded refunds but never received their money back. One also asked for compensation but the post-dated cheque he was given was returned unpaid - something Ms Yuksel blamed on issues with the company's bank account.

The Crown Advocate argued that, when threatened with legal action by her customers, Ms Yuksel would mention that Logistics2Go - another of her companies - was going to take over the debt "to give the impression that a company separate to Parisma had taken over its obligations and thereby buy time".

He claimed that she wanted to cover herself after she was arrested and interviewed by Police in February 2013 as a result of complaints made about Parisma. 

The jury heard that during 2012, Parisma received several Petty Debts Claims and had to "juggle payments between creditors".

In early 2013, the company's bank accounts were overdrawn and in February 2013, the bank decided to stop the company's credit cards.

Deputy Bailiff Tim Le Cocq is presiding over the trial, which is expected to last more than two weeks.

It continues this morning.