Meeting Mike Smallman and how I helped bring about his downfall

AT the height of Mike Smallman’s offending I was receiving dozens of calls and email messages from members of the public who discovered too late in their dealings with him that their money had been lost.

Others monitoring events from afar and who got in touch chose to describe him as the man who never learns, or like a leopard, failing to change its spots.

A self-proclaimed “serial entrepreneur”, this is a man whose previous conviction and jail sentence in 2008 for a £16million distance learning fraud – which tricked thousands of students into wrongly believing they would get recognised qualifications – failed to satisfy his appetite for involving himself in badly-run ventures and siphoning off customers cash along the way.

Even after his arrest by police and pending the court case he was apparently promoting another ‘business’ online, jizz t-shirts, yet another ill-fated enterprise.

My involvement with Smallman began when in May 2013 I received an anonymous tip-off that a clothing company, Newton Aycliffe based APM Clothing Developments, was coming apart at the seams and owing its customers thousands – about £120,000 at the last count.

In true ‘Roger Cook’ style I decided to confront him in person with these allegations. To my surprise, instead of being told to get lost I was invited into the company’s office for a chat and a cup of tea. What followed was a number of lengthy sit down meetings between the two of us in which he expressed his wish to clear his name.

I found him to be confident and charismatic and began asking myself if – as he said – he really had set out with the intention of making a fresh start only for it all to go wrong. Within months, however, the venture had ceased trading. Left in its wake were scores of angry, frustrated customers from across the UK and abroad who saw the reports I had written about Smallman and got in touch to say they were owed money.

The regular exchanges I continued to have with Smallman became more fractious. After trying and failing to speak to him at his home in Richmond, North Yorkshire, he called my mobile phone. In between regular expletives he claimed he had received death threats and said allegations he was ripping people off were rubbish.

Those who were conned by Smallman – professional, intelligent people who included a part-time judge – could not understand how a convicted fraudster and someone who had been banned from holding directorships was so easily able to go into business again. The crucial point is that APM wasn’t a limited company, with all the regulation that brings – it was a sole partnership. His involvement also wasn’t immediately obvious to the outsider and it traded under the name of another man Smallman was friendly with.

By now having wound up APM, Smallman continued to operate two other ventures from an industrial estate in Richmond, Clean Cool Europe, which claimed to have a patent for a unique anti-bacterial quick-drying fabric, and the English T-shirt company.

He was eventually arrested by North Yorkshire Police in October 2013 and returned to jail for breaching the conditions of his prison licence. Such was my involvement with the story, detectives approached me asking for details of some of Smallman’s disgruntled customers for their investigation.

After being charged with fraud in May 2014, I bumped into him again during a later court appearance and even managed to persuade him to pose for a picture for the newspaper. After that there was no more contact between us until the start of his trial when I nodded to him as he sat in the dock. In the intervening period he had gone back to jail again for defaulting on a proceeds of crime order.

Things took a twist when he attempted to persuade a judge that it would be difficult to find a jury that hadn’t heard of him because of the many articles I had written. This was rejected and the trial went ahead anyway, only to later collapse. A re-trial began in May this year when he turned around during his evidence and pointed his finger at me from the witness box during a tirade against the press and police who had destroyed his business and life.

Smallman was happy to tell customers he had exhibited garments at London, New York and Paris fashion weeks and dealt with a thousand different companies, but the reality was somewhat different. Little was spent on fabrics or materials and his clothing company turned out to be a vehicle by which he could indulge his expensive gambling habit. He could not pay the rent, or his own staff, some of whom took him to an employment tribunal and won. The items that were produced for customers were frequently not up to scratch or needed more work.

Throughout all of this Smallman’s paranoia was never far from the surface – everybody was out to get him and those who complained were telling lies. His favourite response was: “Other than being Michael Smallman what have I done wrong?” When problems began the excuses flowed, whether it be suppliers who had let him down or criticism by a former customer on the social networking website Twitter which damaged the business.

As Detective Sergeant Jonathan Rowland, of North Yorkshire Police, told me: “Mike thinks he is always right and believes in himself, but he only has himself to blame, no-one else.”

Charming Smallman 'advertised himself as male escort'

MIKE Smallman advertised himself as a male escort such was his desperation for cash – a far cry from the days when he owned race horses and plush pads in Florida and the Victorian Yafforth Lodge, near Northallerton.

The discovery was made by detectives investigating the businessman who were shocked to find him advertising himself on the internet.

It’s not known whether the smooth-talking Smallman ever had any takers, but it was an indication of how far he had fallen.

The 52-year-old also cut a somewhat lonely figure in court. Having alienated both his former wife, who divorced him, along with his Ukrainian girlfriend Iulia Dow, who became an unwitting victim of his offending after having her identity stolen and loans taken out in her name, there was not one person in the public gallery to support him during his trial.

The man who brought Smallman to book, Detective Sergeant Jonathan Rowland, of North Yorkshire Police’s financial investigations unit, said he was a “fantasist” who believed he was doing nothing wrong with his various schemes.

“It is the nature of the man, no matter what evidence is presented to him he seems to maintain this air of innocence,” said DS Rowland.

“He believes I am out to ruin his life. Even during the trial – a trial costing thousands of pounds of public money – and in the face of overwhelming evidence it’s always a case of ‘Mike has done nothing wrong’.”

Smallman would charm customers into giving him their money and impressed with his boasts.

But DS Rowland said everything he touched turned to rubbish.

“We know he had a villa in America and 40 odd racehorses from [his previous fraud] the National Distance Learning College, but its all gone.

“This time around there’s no money for the victims. About three quarters of the money he has got from them has been spent on gambling. He’s not even a good gambler.”

The detective said that even if his intention was to run APM Clothing Developments as a legitimate business after his release from prison, the gambling quickly took over.

“If someone paid him £5,000, he would gamble and lose it and have to have payment on another order to fulfil the original order. In a funny little way it became like a Ponzi scheme,” he said.

While police admit they can’t stop Smallman running businesses, they intend to seek a serious crime prevention order against him making him subject to stringent conditions which are then monitored.

DS Rowland said: “The law can stop him being the director of a limited company, but if he can operate a sole trader perhaps without putting his name on a website, it’s likely he’ll do that and I can’t stop him.

“However he is in the system and well enough known that if he sets up businesses and commits offences I hope people will tell us.”

Police, who had a forensic investigator look at Smallman’s bank accounts in a bid to identify any criminality, said The Northern Echo’s sustained coverage of the businessman aided their inquiries.

“People Googled him and your articles popped up,” said DS Rowland. “The Echo also gave us some names, we contacted them and that enabled us to gather more evidence.

“We took statements from them and it helped the case.”

Smallman employed convicted murderer as part of clothing team

A CONVICTED murderer was among the staff employed by Mike Smallman at APM Clothing Developments, The Northern Echo can reveal.

Tim Whitting carried out administrative tasks, taking calls from customers and sending emails.

Police established Whitting’s background and interviewed him as a potential suspect in the clothing fraud.

But he was quickly discounted in their investigation with detectives believing he was completely unaware of Smallman’s gambling habit and the hiving off of customers’ funds.

Whitting was aged 35 when on February 5, 2000, he stabbed to death Kelly Hendra, an 18-year-old he had been in a relationship with.

On the day in question he phoned the teenager to tell her there was a letter for her at the house they had previously shared in Plymouth.

She came round and within a short time he stabbed her twice in the body with a knife.

Whitting claimed the attack was not pre-meditated and he had been provoked by comments the victim had made.

He was convicted of murder at Exeter Crown Court and in December of that year sentenced to life imprisonment with a minimum term of 12 years later being set.

He was eventually released on a lifetime prison licence. It is understood he and Smallman, who previously served time in Kirklevington prison, near Yarm, both carried out work placements on the Aycliffe industrial estate before their involvement with APM.

The Echo approached the Ministry of Justice to discuss Whitting’s release from jail, but it said it would not comment on individual cases.