An insolvency investigation found that the director of a charity fundraising organisation had misled the public and held onto funds meant to go to good causes.
Christopher John Stoddard was the director of CS Fundraising Ltd (CSF). Following the acquisition of assets and contracts from an associated company that entered into insolvency, CSF proceeded to trade as a professional fundraiser in 2012.
Acting as a direct marketing agency on behalf of various charities, CS Fundraising would send out around 150,000 letters requesting mail donations each month, until, towards the end of 2014, Mr Stoddard decided to cease trading, placing the company into creditors’ voluntary liquidation (CVL).
CSF was the ninth company with which Mr Stoddard had significant involvement to go into insolvency.
The Insolvency Service launched an investigation into the director’s actions and found that CS Fundraising Ltd had been soliciting money from the general public contrary to the laws that charities abide by.
It also found that the company had misled the public by not complying with these laws and that the director had withheld public donations amounting to, at least, £125,634, received on behalf of charities it represented.
Mr Stoddard admitted to the investigation’s findings and was disqualified from “direct or indirect involvement in the promotion, formation or management of a company or limited liability partnership (LLP)” for a total of nine and a half years.
The Deputy Head of the service’s Insolvent Investigations department, Martin Gitner, said of the case: “Members of the public who donate their money to worthy causes need to be confident that all funds, less agreed costs, are forwarded by the professional fundraising companies employed by the charities.
“In this case, Mr Stoddard failed to fully adhere to legislation directly relevant to the business of his company; he failed to ensure that all due funds due to a charity were paid over and he failed to act in the best interests of the creditors of CS Fundraising Limited.”
He concluded: “Directors who engage in such conduct will be investigated and by the Insolvency Service and enforcement action taken to remove them from the market place.”
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