FRAUDULENT traders are behind bars and banned from acting as company directors after fleecing customers out of £54,000 in seven months through their dodgy fashion packaging business.

Company director Matthew Lynas and sales director Paul Savage both admitted fraudulent trading while running the Luxury Bag and Box Company.

The company sold high end packaging to fashion retailers, bridal wear businesses and florists but failed to deliver the products.

Lynas and Savage also failed to reply to customers when they chased up their orders or fobbed them off with lies to keep them at bay, the court heard.

Despite being unable to honour one order because of the precarious state of the business, Lynas used £26,000 in cash from an international florist (Maison De Fleurs) to pay his rent, fund his rented Mercedes and to buy fashion items for himself.

Lynas, aged 30, of Hillwood Close, Worcester and Savage, aged 37, of Bowden Green, Droitwich appeared at Worcester Crown Court on Friday.

Both pleaded guilty last November on what would have been the first day of their trial.

The company began trading in January 2014 but was dissolved by September 2015. Although it was accepted that the company was set up with 'legitimate aims and ambitions', it was trading fraudulently by February 2015. By then the defendants knew there was a substantial risk that orders could not be fulfilled but carried on taking payments.

During the company's life it acquired 47 customers, some of whom had been the customers of Lynas's father's company, Packlyn.

Of those customers some eight or nine were known to have received what they ordered but 32 were left receiving 'little or nothing' despite having paid all or at least 75 per cent of the order value.

However, the company went on to take in excess of £54,000 from its existing customers and five new customers over a seven month period.

Michael Hall, prosecuting, said the defendants professed to produce all goods in-house but production was subcontracted to a supplier in China so they could offer cheaper prices to their customers.

Chinese suppliers, eager to get a foothold in the British market, were 'lenient' with Lynas and Savage and did not ask for money up front which made things look 'markedly better than they were' he said.

Financial pressure on the company increased as did its VAT liability. The company never had a VAT number and at no stage was a VAT return completed.

In December 2014 the company took an order of £80,000.

Mr Hall said: "It may well have been that through inexperience, negligence or ineptitude that the two defendants had deluded themselves up until this point that they could trade their way out of their difficulties. Here on in it was obvious that they could not. The position was hopeless."

The fraud took two forms - taking new orders from their Chinese suppliers and abusing terms and conditions to extract final payments from customers without any hope of those clients receiving their orders.

"This, say the Crown, was simply stealing" said Mr Hall.

With an overdrawn bank balance and unfulfilled contractual obligations of £175,000, Lynas took almost £26,000 as a 75 per cent deposit from Maison De Fleurs with no prospect of them ever receiving their order.

Meanwhile, Lynas was described as going on 'a personal spending spree' in River Island, Louis Vuitton, Next , Zizzi, JD Sports and Selfridges.

In total £2,600 went on payments for his rent and for his Mercedes and £10,000 was transferred to Packlyn, the company once run by his father, under the guise of a loan.

Mr Hall said: "All the while Lynas and Savage had their backs against the wall, customers tell of being unable to contact them and when they were able to they were met with a catalogue of untruths designed to keep them at bay; that Lynas was in China; that the goods were at the port about to clear customs; that there had been a fire at the non-existent storage facility; that Lynas was in hospital ill; that he had been in a car crash and so on."

Lynas was a man of previous good character aside from a public order offence but Savage has served a prison sentence for fraud already.

Richard Hull, for Savage, said his client was never registered as a director and invited the judge not to disqualify him from being a director, handing up 'powerful references' on his behalf.

He added: "He never had any management function within this company. He never had access to the account. He was never entrusted with significant sums of money."

Abigail Nixon, for Lynas, handed up references to the judge.

She said the case had the hallmarks of poor planning rather than a plan to defraud.

She said: "There's little doubt the company had severe cashflow problems."

Miss Nixon said Lynas had a hope, however vain, that the company could get itself out of its financial difficulties.

"He was not living a luxurious, glamorous lifestyle. He has shown remorse," she said.

Judge Cartwright jailed Lynas for 17 months and Savage for 14 months.

He said of Lynas: "I ask myself, do you pose a risk or danger to the public? The answer is yes."

He referred to a probation report in which Lynas appeared to view himself as the victim of the whole judicial process and thought the case should have been a civil rather than criminal matter.

Judge Cartwright said neither defendant had a realistic prospect of rehabilitation and spoke of the importance of deterrent sentences.

Both were also disqualified from acting as directors for five years.

Sergeant Sara Goodman of Worcester Police said after the hearing: "As a result of several complaints received from customers who had failed to receive their goods, an investigation commenced which revealed numerous victims from mainly London and the surrounding areas.

"The investigation by Warwickshire Police and West Mercia Police's Crime Bureau found that the money had been spent rather than used to conduct legitimate business with suppliers of the luxury packaging sold to customers."

Investigating officer PC Barry Morton added: "This has been a long and complex investigation and I am pleased with the verdict of the court."

Both defendants face proceedings to recover the assets stolen.