Ideal Insurance director Faron Wilson didn't know partner Neil McKay had spent time in jail

A broker accused of defrauding customers in a £1m scam claimed he had no idea his business partner had spent time in jail, a court heard.

Faron Wilson told Southwark Crown Court Neil McKay approached him to start up Ideal Insurance in 1997.

Only a year earlier, McKay had received an eight month prison sentence after admitting eight counts of obtaining property by deception.

Defending barrister Martin Taylor said: “Did you know Mr McKay had a prison sentence in 1996, were you aware of that?

Wilson said: “No I was not.”

Asked about starting up the business, Wilson said: “I felt quite proud. I felt that I was working in the industry for a number of years doing motor policies and I was quite pleased that he offered me the opportunity.”

Wilson said later in his time at Ideal, around 2005, there was FSA correspondence and a number proving that McKay was an approved person.

Wilson said he raised between £3,000 and £4,000 by selling his Ford Escort and then struck up a ‘50/50’ joint ownership deal with McKay to start the firm.

He told the jury he was in charge of pulling in new business for renewals and dealing with quotations, while McKay struck up the deals with underwriters and dealt with the banks, although he handled cheques when McKay was on holiday.

Wilson admitted a love of classic cars and paying £5,700 outright for a truck between 2001 and 2002.

At one point, Wilson’s owned an Audi A6 worth £27,000. Asked about the car, Wilson said: “The finance was in my name but Neil was paying in.”

Wilson is accused of running the scam between 2003 and 2008, pocketing around £1m by selling customers bogus policies and cancelling valid policies. Company clients included guesthouses and hotels.

Beech Underwriting Agencies and East Kent Underwriting were named in court in connection with Ideal.

Willis, RJ Kiln and Lloyd’s of London were also named as partners, but all three denied any involvement.

The insurance scam was revealed after Primary General complained to police about Ideal’s business practices in 2008.

Taylor said: “Were the terms of arrangement with Primary ever discussed with you by Mr McKay.”

Wilson replied: “No.”

Wilson, 40, the only defendant, denies one charge of conspiracy to defraud and two charges of fraudulent trading.

The jury was told last week McKay has “accepted responsibility for fraudulent activities while at Ideal Insurance.”

Trial continues.