The bosses of a Devon boatyard told 'lie after lie after lie' as they tried to prop up their failing business by allegedly swindling their customers, a jury has been told.
Andrew Bowden and Paul Randle ran their Exe Leisure business on Topsham Quay but sold boats which belonged to clients and used the money to pay business debts.
The company finally went into administration in 2006 and left boat sellers and hire purchase companies more than £100,000 out of pocket.
Brokerage clients were told their boats were still up for sale at Topsham when they had been sold weeks before and the money paid into the bank.
When vendors discovered the boats had been sold and demanded their money they were told 'lie after lie after lie' to fob them off.
Bowden and Randall also bought six boats worth a total of more than £100,000 on hire purchase and sold them even though they still belonged to the finance company, Exeter Crown Court was told.
Randle, aged 48, of Exeter Road, Topsham, denies fraudulent trading. The jury have been told Bowden does not form any part of this case.
Randle says he was not involved in handling money within the business and left all financial matters to his fellow director.
Mr Malcolm Galloway, prosecuting, said both men ran a boat repair yard and a brokerage called Exe Leisure and Solent Management and 'robbed Peter to pay Paul' when they ran into financial problems in 2005 and 2006.
The directors should have kept clients money secure in a separate account but instead used it to cover losses which mounted to £403,000 a year.
The business made profits of up to £40,000 a year until 2005 but then started to make heavy losses and went into insolvency in July 2006.
He said brokerage agreements included a clause which required proceeds of sales to be kept in a segregated client account but all but £20,000 were instead paid into the company's main trading account.
Between August 2005 and June 2006 the brokerage sold 13 boats for a total of £154,390 but passed on just £29,500 to customers.
They also sold boats which were owned by finance companies, two of which have never been traced.
Mr Galloway said:"This was a company with significant financial difficulties. Bowden and Randall used unlawful and illegal ways to keep it afloat.
"They were trying to realise cash by selling boats which were subject to hire purchase agreements. This was plainly dishonest. If they had asked the finance company of they could sell them they would be told no.
"When it came to brokerage, they were keeping other people's money and putting into their main business account rather than keeping it separate."
He cited the case of one owner, whose Searay 215 speedboat called Mr Bubbles was sold for £17,500 in August 2005 but were told it was still on the market months later.
Randall finally told them the boat was sold in January 2006 but said Exe Leisure were still waiting for the money to arrive in full.
Mr Galloway said:"That was an utter lie. In March Randall wrote an e mail assuring the client the money had not been used to finance their business.
"We say the client was plainly defrauded and eventually lost £8,855. They were plainly using her money for their own company and the vendor was told lie after lie after lie.
"Other clients were not even told about sales when the money was used for general trading. It would have been clear to the two directors they were in trouble.
"They were using other people's money to try to keep the company going for another month in the hope things would improve. They were robbing Peter to pay Paul."
