The founder of Cardiff Sixth Form College was a “willing participant in fraudulent activity” that saw millions of pounds diverted and stolen, a court has heard.
Yasmin Sarwar is on trial at Merthyr Tydfil Crown Court in connection with the running of the college, which was originally set up in 2004 under the name Cardiff Centre of Excellence.
Sarwar, 45, initially tutored A-level students at her home in Cardiff before the business grew, was renamed, and moved to a building on Newport Road in the city.
Charity status and alleged sham companies
The company was registered as a charity, and Sarwar, along with her then husband, Nadeem Sarwar, were listed as directors and therefore trustees of the charity when it was granted charity status.
During the opening day of the trial on Tuesday, prosecution barrister Mark Cotter KC told the jury that charities are afforded “significant tax breaks” compared with non-charitable companies, and that profit must be used for charitable purposes rather than distributed to shareholders.
Mr Cotter KC said Sarwar, who is no longer married to Nadeem Sarwar, “was a wilful, intelligent and manipulative woman who was a willing participant in fraudulent activity”. He also told jurors she “was prepared to set up sham companies to divert huge sums of money from her husband after their relationship went sour”.
Allegations and investigation
Nadeem Sarwar, 50, pleaded guilty last week to theft. The offence took place between February 19, 2008, and October 31, 2016, and related to £5m belonging to Cardiff Sixth Form College.
The court heard that Yasmin Sarwar resigned as a director of the college in 2013 and set up two companies, with herself as the sole director and shareholder of both. The prosecution alleges she set up the companies “as a fraudulent mechanism to syphon huge sums of money from the charitable company”.
Mr Cotter KC added: “She was taking money that did not belong to her from the charity and then trying to cover it up.”
The allegations came to light in 2015 when an employee raised what he described as a “culture of fear” within the college and began to have doubts about its “financial management”.
In May 2016 the Charity Commission confirmed it intended to look at the college’s books. Mr Cotter KC told the court that during this time an employee was asked to take annual leave and later asked to sign a non-disclosure agreement.
Bank accounts and ongoing trial
During the audit, “various areas of concern regarding the apparent mismanagement of funds” were identified and a statutory inquiry was launched. A police investigation later discovered “several bank accounts that all bore different variations of the college’s name”, according to Mr Cotter KC, who added that money totalling £4.1m in student fees “did not go into the main bank account as it should have done”.
He told the jury that “the bank accounts are at the heart of this case”.
Cardiff Sixth Form College was bought by Dukes Education in 2018, and all charges relating to this case pre-date that sale.
Yasmin Sarwar, of Hollybush Road, Cyncoed, denies a charge of abuse of position, two counts of theft by an employee, two counts of carrying on a business of company with intent to defraud creditors or for other fraudulent purpose, acquiring/using/possessing criminal property, and three counts of concealing/disguising/converting/transferring/removing criminal property. The trial continues.
