Cocaine-taking fraudster ripped off over car sale deal, court told

Stephen Spellacy, 39, was jailed for eight and a half years in 2009 for his part in an audacious fraud which stole £1.4m from Norwich Union, now known as Aviva.

Now the former Humberside Police officer is involved in another legal battle – after prosecutors began an attempt to strip him of assets he paid for with his criminal proceeds.

Leeds Crown Court heard yesterday that Spellacy and three other men involved in the November 2007 fraud may have each netted hundreds of thousands of pounds from the conspiracy.

Recorder Mark Bury was told that Spellacy, formerly of Garths End, Pocklington, and fellow conspirators John Taylor, 37, Keith Swift, 49, and Peter Harrington, 40, faced potential confiscation orders of between £700,000 and £1m.

All four men could be sent to prison if they fail to repay the money on time.

Mike Sankey, a financial investigator at North Yorkshire Police, told the court that Spellacy’s assets had included an Audi Q7 car, which he bought for £37,000 within a month of the fraud.

However, the hearing was told that Spellacy insisted he received only £1,000 for the vehicle when he agreed to sell it in 2008.

Mr Sankey said: “The story that has been given by the defence on this is that Mr Spellacy decided to get rid of the vehicle because he thought it was conspicuous to have such a high-class vehicle.

“He took it to someone in Manchester, who he cannot name. He was given £1,000 and that person told him he would give him a further £29,000 when that vehicle was sold. He never saw that individual again.

“He said he made that decision because he was in a poor state of mind, having taken cocaine.”

Mr Sankey added: “I don’t find that account credible.”

Spellacy’s other assets are said to have included £4,000 in cash which was found in an envelope on a table in his flat when he was arrested. He claims this was a loan.

Spellacy also had a BMW car, which was sold at auction for £5,280, and had a £24,451 share in the home where he lived with his wife. The couple have since divorced.

Financial investigators found that Spellacy had spent thousands staying at expensive London hotels with “colossally” sized rooms, and all the bills had been settled in cash.

He and Taylor, who became friends because their wives worked together at Marks and Spencer, also paid money to escorts, the court heard.

Taylor, formerly of Nunthorpe Crescent, South Bank, York, was an operations manager at Norwich Union and played a key role in the major fraud, transferring more than £1m into an associate’s bank account.

But he told the court yesterday he had no idea where the money had gone, claiming all the cash he had spent came from earlier, smaller frauds which he and Spellacy had been involved in.

Taylor said he had expected to receive a quarter of the amount stolen in the major fraud, but claimed he had not received a penny.

He said he met Harrington, of Newland View, Normanton, and Swift, who is serving a jail sentence at Doncaster Prison, for the first time when they appeared together in the dock.

The hearing continues.