A businesswoman who duped dozens of customers into believing she could provide cut-price iPads wept as she was jailed for two years after admitting a £450,000 fraud.
Kirsty Cox, a mother-of-two, from Newton Aycliffe, County Durham, caused misery to children last Christmas after tricking their parents into thinking she could source the highly-valued presents, Judge George Moorhouse said at Teesside Crown Court.
In what was a “ludicrous” situation, she spent £1.52m on full-price iPads from PC World and was selling them at a loss to some customers, after taking thousands of orders, Paul Cleasby, defending, said.
By the time Cox, 37, was arrested in December 2012, angry customers were gathering outside her home, demanding to know what had happened to their orders.
After she was arrested, she was kept in custody for her own safety, such was the anger she caused locally. Previously, she pleaded guilty four counts of fraud totalling £450,000 said to have occurred between August and December 2012.
Shaun Dodds, prosecuting, said the actual loss to customers was more than £1.1m.
Cox used her “niceness” as part of the con trick, which spiralled out of control as word spread about the good deals she was offering, a former business partner said.
Neil Hathaway, who ran a successful communications firm, said in a statement read out in court that people were contacting him to ask what had happened to iPad orders they had placed with Cox.
“I started looking through some of Kirsty’s paperwork in the office,” he said. “I rang Kirsty and asked her what on earth was going on. How had the business catapulted to this size? Was she paying VAT and was she fulfilling the orders?
“On every level she reassured me with what I now know to be lies.”
Later, Mr Hathaway received a call from Cox to say she was lying low in a Middlesbrough hotel. His firm lost £40,000 as a result of the scam, the court heard.
“Kirsty has clearly traded on my good name from the business I have set up and nurtured. I am shocked by the extent of the deception and I am hurt. Kirsty has taken people’s trust. She is an articulate, well-presented lady and has used her ‘niceness’ to deceive people.”
Judge Moorhouse jailed Cox despite hearing her family had suffered while she spent six months on remand. “You have two young children who suffered miserably while you were on remand,” he told her as she wept in the dock. “I am afraid they are going to suffer even more.”
He said her offending “caused misery to some people, especially children who were expecting presents which never arrived”.
Cox had claimed she had a number of different legitimate sources for the iPads, Mr Dodds said. A contact in the armed forces could source duty-free tablets from Dubai, she told some people, while others were told a company was selling them off cheaply as they had been on the shelves for 90 days.
Cox was able to fulfil initial orders and, as word spread, customers made orders for friends, family and colleagues, the court heard. Statements from some were read in court, including one who said their children would not receive the present they wanted and they would have to borrow the £1,000 that they had lost.
A middleman who lost £21,000 said they felt terrible and would try to reimburse their clients out of their own pockets. Another feared losing his businesses and home.
When she was arrested, Cox told police: “I have made some very, very, very bad business decisions and ended up having to pay full price in order to fulfil some people’s deliveries.”
She believed she had not been able to deliver 4,000 iPads that her customers ordered.
In mitigation Mr Cleasby said she did not make a profit from the scam, and her trading did not start out dishonestly, and when it escalated she did not put an end to it.
“There was no exit strategy where she could obtain vast amounts of money and fly away to an exotic lifestyle,” he said. “Everything was done in her own name and registered to her own address.”
He added: “The business model was doomed from the outset.”
Cox was suffering from depression at the time of the offending.
Mr Cleasby said: “There was no planning, there was no sophistication. It appears to have been a snowball effect which quickly turned into an avalanche, which led eventually to her arrest.”