High court closes charity scam

Two companies raised £300,000 in the name of charity but kept cash

Two companies that tricked small businesses out of £300,000 by claiming to do charitable work have been wound up in the high court.

The two companies, Magnify Media and Sabretooth Media, asked small businesses to pay for magazine adverts, claiming the money would be passed to good causes.

But an investigation by the Companies Investigation Branch of the Insolvency Service found no evidence that the two Manchester-based companies had produced any magazines or donated any money.

It also discovered that the two companies were part of a wider network engaged in similar activity, although it said that accounting records were "wholly inadequate" to explain the income and expenditure of the companies.

The two companies were placed in compulsory liquidation on 3 December.

David Ainsworth recommends

The Insolvency Service

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