Two Babushka directors jailed for fraud

Two directors of discredited bar company Vodka Bar Management have been jailed for conning £2.5m out of a bank and a loan company to fund extravagant lifestyles.

Gary Hibberd, 45, and Timothy Allen, 36, were using the money to pay themselves £250,000 a year and running a Bentley Azure while they ran the Babushka chain of bars.

The pair fell out with a string of major industry companies who were taken in by them. Their most high profile partnership was with Laurel Pub Company, where they ran as many as seven bars in a joint venture.

The partnership ended when around £640,000 in overdue rent due to Laurel, which was run by Ian Payne at the time, disappeared from a joint account.

Gary Hibberd, 45, and Timothy Allen, 36, pleaded guilty to two counts of conspiracy to defraud between 2002 and 2004. A third charge was ordered to lie on the file. Hibberd was sentenced to six years and Allen to three-and-a-half years.

The judge said Hibberd had corrupted Allen but added that "[Allen] is his own man and not a vulnerable sheep of a man".

Southwark crown court in South London heard how the pair ran a string of bars and clubs across Britain, including the Babushka chain in Glasgow, Manchester and London's Hampstead, Notting Hill and Brixton. Other venues included Nylon and Style in the City of London.

Judge Michael Gledhill condemned them for using "deceit, lies, forgery and eloquent persuasion" to defraud the Royal Bank of Scotland and loan company Lombard North Central.

"They were completely taken in by you - to use a colloquialism they were well and truly conned,' the judge said. "A great deal of the money was used to fund an extravagant life and you were unscrupulous in the way you persuaded them to part with their money."

The judge added: "A clear message of deterrence must be sent from this court that those who dishonestly obtain money by fraud will be punished.

"This was not a victimless crime and the losses are paid for in the long run by the public in general."

High-end fashion bars​

The court heard that the pair secured overdraft facilities by claiming they had a multi-million-pound property portfolio. They paid themselves £250,000 a year and bought a Bentley Azure to impress clients. After their arrest neither RBS nor Lombard received a penny from the bankruptcy proceedings.

Defence counsel Geoffrey Cox QC told the court: "Their business was brought down as a consequence of over-ambition."

He added: "They ran high-end fashion bars which traded by attracting celebrity clients.

"They were well reviewed in the industry press and that necessitated an expensive and luxurious appearance to appeal to the end of the market they were aiming at."

Hibberd's brother Anthony, 42, and John O'Donnell, 43, also of Pimlico, London, had also been due to stand trial but were cleared of all charges when the prosecution offered no evidence.

Outside court today Detective Sergeant Jane Moore of the City of London Police, said: "Hibberd and Allen abused their positions to benefit their business and for their own personal gain.

"The fraud they committed not only affected large organisations. It directly impacted upon the livelihoods of smaller companies, ultimately putting some of them out of business."

Banned​

All four directors were banned from holding directorships for 40 years in 2004. They all found work shortly afterwards with the company that owned their former business.

Gary and Tony Hibberd, who gave voluntary undertakings last year not to become directors or hold senior management positions for 12 and 10 years respectively. John Patrick O'Donnell and Timothy Allen, gave similar undertakings for periods of 11 and seven years respectively.

The directorship bans for the four partners resulted from failing to pay sums in respect of VAT, PAYE and NIC. The first Babushka opened in 1993 in Blackfriars Road as a partnership between Gary Hibberd and John O'Donnell. Gary's brother Tony, who went with the actress Claire Sweeney, joined in 1998.

Punch is understood to have ended its relationship with the four partners at a Babushka site in Kings Cross in 2005.

A Punch source said at the time: "We kicked them out when they started playing silly buggers on the rent. They were still running the site. They know no shame."

Greene King Pub Partners considered suing them for £614,000 after they reneged on an agreement to take a 20-year lease on the Lord Palmerston in Chelsea's King's Road.