A businessman set up and used charities for his personal benefit, including transferring hundreds of thousands of pounds of charitable funds into his personal bank account, according to a Charity Commission class inquiry probe.

He also appointed trustees, who had no knowledge of the payments, and were effectively only running the charities in name only.

The investigation launched last year and focused on charities set up by Richard Gary Lorrison to support young people in Africa. The regulator has now banned Lorrison from being a charity trustee.

The probe looked at the running of the charity Education for Gondar, which was set up seven years ago by Lorrison as its chair to support young people living in the Gondar region of Ethiopa. It is subsequently in the process of being dissolved and removed from the charities register.

Other charities include Education Sidama, Education in Wester Province, Kenya and Education for Nynza, which were all set up four years ago but were dissolved between December last year and January this year.

All were linked to a company called MWA Management Advisory Services, which Lorrison was the sole director and member of.

Two years ago the regulator received a further nine charity applications linked to this company.

The regulator found that £270,717 in Gift Aid payments was transferred from bank accounts of Education for Gondar and Education in Sidama to the personal bank account of Lorrison.

When these payments by HMRC were made into the charities’ accounts they were then transferred “immediately” on the same or next day into Lorrison’s bank account.

“Throughout the course of the investigation the class inquiry sought to contact Mr Lorrison and the other trustees in order to gather information as to why these payments were made (to him), said the Commission.

“Mr Lorrison never responded to the class inquiry’s contact attempts and failed to comply with orders and directions of the Commission.

“Failure to comply with orders and directions of the Commission is misconduct and/or mismanagement in the administration of the charities.”

However, they point out that “whilst Mr Lorrison failed to co-operate, the other trustees engaged with the investigation.”

'Trustees in name only'

The regulator found that these trustees were appointed by Lorrison after responding to a recruitment advert. The businessman then said he would “be in touch” with them about details of the role but then “ceased all contact” with them.

“All the trustees Mr Lorrison recruited across the four charities had no involvement with the charities and were completely unaware of the concerns raised by the investigation until the class inquiry engaged with them,” found the regulator.

It also found that Lorrison had “sole control over all the charities as well as their bank accounts. The trustees were effectively trustees in name only”.

“The Commission concluded that Mr Lorrison set up and used the charities in order to personally benefit from them and as a result was removed as a trustee,” said the regulator.

This means he is “disqualified from acting as a trustee in any charity”, it said.

“The abuse of charities for unlawful purposes is absolutely unacceptable,” added the Commission.

“In instances where the Commission uncovers or has evidence to suggest that a civil or criminal offence may have been committed, we will share this information, through our statutory gateway, with the police and other relevant agencies.

“Charities can be attractive to criminals to disguise unlawful activities. The Commission will seek and support prosecution where they believe that criminal activity relating to maladministration or fraud occurs in respect of a charity.”

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