Michael Stainer, 74, gave staff at the Grand doctored and ‘misleading’ payslips showing income tax and national insurance deductions. However, a court heard yesterday he had in fact pocketed the money and used it to pay the mortgages for the flats in the imposing Grade II listed building in Folkestone, Kent, which was once frequented by the family royal.

Stainer was jailed for three years at Southwark Crown Court in London yesterday on two counts of revenue fraud and one count of false representation fraud between 2011 and 2015.

During the trial, Stainer, who is a qualified accountant, accepted the money had not been paid to HMRC, but told jurors he was keeping the money as he did not want his employees to lose their use.

But Judge Gregory Perrins said: ‘It is clear to me that you did not give any thought to the impact this had on your employees.

The judge continued: “You were deliberately misleading them about what was going on with their pay because they all assumed PAYE and National Insurance were paid in the normal way and you must have known that was not the case.

“You put each of them at significant risk of having to pay significant tax once the fraud has been discovered, as well as putting their state pension at risk.

“You took a conscious risk with their financial security in order to keep your business afloat.

“You knew what a bad financial situation the Great was in, but you continued for years to do everything you could to keep the taxman at bay rather than accept the reality of the situation – something you should have do a long time ago.”

A person convicted of fraud by misrepresentation on indictment faces a maximum penalty of ten years imprisonment or a fine or both.

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