THE ringleaders behind a fraud that netted hundreds of thousands of pounds-worth of Government funding have been sentenced following a long-running investigation.

The complicated internet-based scam, which targeted a student-funding scheme, was on Cleveland Police’s books for more than ten years.

But now the gang has finally faced justice for fleecing the Government-funded Individual Learning Account (ILA) between 2000 and 2001.

And computer expert Harpal Toor, 29, of Ingleby Barwick, near Yarm, was given an 18-month sentence suspended for two years after admitting his part in the scam, when he pleaded guilty to fraudulent trading.

Teesside Crown Court heard that Toor, of Grosvenor Court, became a director of Home Loan Centre, which submitted false claims for student funding that were “in excess of £1m”.

The ILA system was set up in 2000 to provide grants of up to £200 for people aged over 18 who enrolled on educational courses.

But the scheme was largely unregulated and was shut down literally overnight in November 2001, after “haemorrhaging money” to fraudsters, said Andrew Wheeler, prosecuting.

There was an estimated loss to the Government in excess of £90m nationwide through false claims from so-called learning providers.

The court heard Toor played a “subordinate role” and benefited to the sum of £145,000.

Speaking after the hearing, Detective Inspector Dave Turnbull, of Cleveland Police, said: “This is one of the longest running criminal investigations in Cleveland Police’s history. This has been an extremely lengthy and complex investigation that has been brought to a successful conclusion.”

Other members of the gang include Lashman Chatha, 38, of Rugeley, Staffordshire, who admitted fraudulent trading; James Morsley, 50, of Birmingham, who admitted obtaining a £266,116 money transfer by deception; Sunil Gohil, 47, of Coventry, who admitted money laundering to the sum of £126,000, and Paul Atherton, 48, of Birmingham, who admitted conspiracy to defraud.

Recorder David Dobbin, said the defendants were all involved in various ways, some as learning providers.

Chatha was jailed for two years, while Gohil was imprisoned for 12 months.

Morsley received a 12- month sentence, and Atherton was jailed for two years.

Chatha has since been ordered to pay back £129,000, Morsley £266,000, and Atherton £370,900. Gohil was deemed to have no assets.

A proceeds of crime hearing in respect of Toor is due to take place this autumn.