THE boss of an ailing business used customers' cash to try to prop up the floundering firm and to fund a betting habit which saw him lose £10,000, a month, a jury heard.

Michael Smallman, 52, has gone on trial accused of "quite literally gambling with money" he had been paid by entrepreneurs to make clothing.

It is also alleged that Mr Smallman, from Richmond, North Yorkshire, stole from his Ukrainian girlfriend and committed fraud offences by stealing her identity.

The jury at Teesside Crown Court was told that they will hear evidence from disgruntled customers of Mr Smallman's clothing business in Newton Aycliffe, County Durham.

Prosecutor Liam O'Brien said "by and large they will speak with one voice" and say that the initial impression they had of the alleged fraudster was a good one.

During his opening speech, Mr O'Brien told the jury: "He appeared to be an intelligent, knowledgeable and trustworthy man, who was charismatic, charming and convincing.

"They will say they were given various assurances by Mr Smallman as to the quality of goods they would receive and the time in which they would receive them.

"They agreed to do business with him and transferred significant sums of money into the defendant's business. Some paid hundreds, others paid thousands. All were let down."

One complainant wanted to launch a range of rugby jerseys in time for a trade show in Dublin but his order was never fulfilled, Mr O'Brien told the jury yesterday (Monday, May 9).

Another entrepreneur saw a gap in the market for formal maternity wear and was told she would get prototypes from Mr Smallman but was also let down, it is alleged.

Mr Smallman, of Castle Hill, Richmond, denies fraud relating to his clothing development business said to have been committed between July 2012 and November 2013.

He faces a further ten counts concerning his former partner - the theft of a £1,500 pair of earrings which he pawned and the theft of 1,500 US dollars she had hidden in a sock.

The rest of the charges on the indictment are fraud and involve taking out payday loans in the woman's name, and getting a logbook loan for £500 based on her BMW.

Mr O'Brien said that the alleged offending amounted to around £100,000 and said he had behaved dishonestly by making "completely unrealistic" promises to customers.

He told the jury: "In some ways, it is a sad case. You may feel this is someone who started off with an honest and legitimate intention but over time their personal demons, their problems, overcame them.

"It is a case in which you may actually feel some pity for the defendant. You may feel sorry for him. But it is a case, say the Crown, when you look at all the evidence, this defendant committed each and every one of the 11 offences he faces."

The trial continues.