A BUSINESS which was trading fraudulently was used to fund the purchase of a £37,000 horse and a three bedroomed detached home, a jury has been told.

Sophie Auston, who is on trial at Teesside Crown Court, denies knowingly being a party to the carrying on of a business with intent to defraud creditors and other persons between August 1, 2009 and December 1, 2011.

The trial centres on a venture run by Ms Auston as a sole trader, Auston and Co, which was linked to the operation of a drift mine in Derbyshire, Eckington Colliery, of which the defendant was previously a director.

Loading article content

The prosecution, which is being brought by the Department for Business Innovation and Skills, alleges money was effectively siphoned off from the colliery with some of it subsequently spent on purchases for 24-year-old Ms Auston, who also allowed her own bank account to be used in the scam.

Prosecuting, James Rae said the defendant visited a horse producer and supplier to the dressage market in Holland in order to buy a horse, US Abe, which cost 45,290 euros (£37,410).

A payment plan for the horse was put in place and while sums totalling 40,381 euros were handed over, 4,909 euros remained outstanding.

When contacted about the outstanding sum Ms Auston, an amateur show jumper, said she had no knowledge of it and it was never paid.

The fraud is also alleged to have paid for a house in Whitworth, Spennymoor, County Durham.

Mr Rae also told the jury how £100,000, which had been held in an account and was money deducted from the wages of miners at Eckington Colliery, disappeared. The cash had been earmarked to pay the tax of pit men at the colliery who were self-employed.

Ms Auston, 24, of Alnwick Drive, Spennymoor, County Durham, denies a single charge of participating in a fraudulent business.

The trial is expected to last the remainder of the week.