It has been quite a while since I have rebooted one of my newspaper investigations. So here is one exclusive I still treasure. It involves a convicted fraudster called Alex Lothian. I first met Mr Lothian – and was taken in by – while Chief Reporter at the Galloway Gazette in early 1994. I followed him while at The Scotsman and his final comeuppance came in Cupar Sheriff Court in May 1995, while I was working for The Herald. Guys like these – and I have come across far too many of them – are leeches on society.
A FRAUDSTER whose most recent deal was to front a £35 million heritage project was convicted yesterday in a case involving £1,700.
Alex Lothian, 44, of Newgrange Park, Pittenweem, was ordered by Sheriff Charles Smith at Cupar to do 250 hours of community service.
Afterwards, Lothian said he was a ”ruined man” and he would never work again.
He was originally indicted on two separate charges. The first alleged attempted fraud of £280,000 and obtaining £15,000 in connection with the failed Litetronics Lamps business in Anstruther during 1991 and 1992. The second charge was of fraudulently obtaining £1,716.02 from a Stranraer deer farmer, James Baxter.
His trial began on May 2 and was set to last at least three weeks. However, three days into proceedings, after only two witnesses were called, the fiscal, Alan Kempton, offered an amendment to the charges.
In return for dismissing the first charges, Lothian pled guilty to the fraud against Mr Baxter and financial consultant Douglas McIntyre and farming consultant Alastair Gray.
He admitted defrauding Mr Baxter of £1,716.02 by pretending he was acting on behalf of the Department of Trade and Industry.
His QC, Edward Targowski, yesterday pled for his client to be spared a custodial sentence to allow him to care for his 82-year-old invalid mother.
However, Sheriff Smith, noting that Lothian already had a criminal record for fraud, said: ”It is obvious that you have returned to your bad ways. Your offence was deliberate and involved stealing. You seem to have ideas beyond your abilities and those who are unfortunate to become involved in your projects become the victims.
”No doubt a custodial sentence is appropriate for you,” he said, adding that it was a ”narrow decision” to impose 240 hours of community service to indicate the gravity of the offence.
In the summer of 1992, Mr Baxter was struggling to maintain his deer farm at Leswalt, near Stranraer, and decided to investigate plans to diversify.
He was introduced to Lothian as a business consultant but Lothian falsely claimed to be a licensed credit broker and DTI adviser.
Mr Baxter was soon convinced that the Fife consultant could help him. Lothian increased his credibility when he introduced an innocent party, Alastair Gray, who he claimed was a deer farming expert.
On August 5, 1992, Mr Baxter received written proposals for his farm’s redevelopment and details of DTI assistance and Government loans.
The sting was attached to the end of the document: ”The charges for consultancy services will be on the basis of £25 per hour exclusive of VAT and do not include expenses for any travel, telephone, postage, facsimile or typing charges which will be billed at cost.” The first £1,000 had to be delivered upfront.
Mr Baxter was instructed to hand over a £500 deposit ”made payable to Alex Lothian”.
More than a week later, Lothian presented his scheme to develop the farm into a profitable deer park and visitor centre. The plans included a tree-top walkway, an activity wood, restaurant, gift shop, and exhibition area.
Two days after Mr Baxter paid his deposit and a further £500 ”to set up the consultancy contract”, a bill for £504 arrived from Lothian for the first 16 hours of Mr Gray’s consultancy time.
Further bills, varying from £3.53 for a business lunch to £212 for VAT, were soon dropping through the letter-box. However, as a request for a further £1,000 of consultancy work arrived, Mr Douglas McIntyre of St Monance — who was innocently involved in the Frances mine project as Lothian’s financial adviser — had been tipped off about Lothian’s activities and in turn warned Mr Baxter.
His warning came as Lothian — now gaining new confidence — uprated his consultancy fees to £50 per hour.
”It was only a bit of nifty footwork in stopping cheques so quickly that he only managed to get £1,001 from me,” observed Mr Baxter. ”I saved £700 and could have lost a lot more.
”He was a cracking good con-man. All sort of suckers get taken in by Alex Lothian. Thank God he has now got his come-uppance. It may stop him repeating his routine again.”
Soon after defrauding Mr Baxter, Lothian became involved in a bogus £35 million heritage project to restore the derelict house and grounds of Barnbarroch, 20 miles away near Wigtown.
The brains behind the project — Andrew McCulloch, 59, a solicitor and property developer — was jailed two months ago for defrauding the Royal Bank of Scotland out of £300,000 in a gamble to keep other business interests afloat.
Last October, Lothian was forced to resign as consultant to the project, as he faced fraud charges involving his activities in Stranraer and Anstruther.
In 1993, while attending a business course in Newton Stewart and with the help of a public grant of £2,400, McCulloch developed a scheme for a cultural theme park similar to the Landmark Centre near Aviemore.
McCulloch was introduced to Lothian, who also saw the opportunity to cash in on Scottish interest in its cultural history.
By October, Lothian had launched a £20 million development plan for Barnbarroch House and its 3,500 acres.
He claimed the scheme would create more than 200 jobs and was supported by a project consortium including merchant banks and conglomorate companies. The funding and backers did not exist.
The project, he said, would include a nature reserve, historical and cultural centre, theatre, museum, butterfly farm, forest walkway, leisure centre, shops, restaurant, and 300 holiday chalets; and would attract one million visitors a year to economically depressed Wigtownshire.
Despite the hype, nothing happened for six months and the regional council’s planning department closed its file on the development.
In May 1994, Lothian admitted he and McCulloch had parted company.
Lothian told the press: ”Too late we discovered that Mr McCulloch did not have his own funding to go ahead.”
He said a new scheme was under way involving a £23 million trust status development of Barnbarroch as a national museum and educational centre with residential accommodation provided by 200 Norwegian chalets.
Another four months passed before a second relaunch of the Barnbarroch scheme was undertaken with uprated costings of £35 million.
Lothian claimed that more than 25,000 people had already joined the trust, each subscribing £30 a year to the scheme and between £2 million and £3 million had been raised. Investigations by The Herald discovered that no such membership or level of investment existed.
Within a few days of the relaunch, Lothian appeared at Cupar Sheriff Court on charges involving fraud.
Last night, Lothian told the Herald: ”I am happy to admit I have made mistakes. But I am a ruined man because of this conviction, press reports, and the way the police have warned people against me.
”One thing’s for certain. I’ll never work again.”