PARALYMPIAN from the North-East had a secret double life running a benefits scam while buying prestige cars tax-free and selling them at a vast profit, a court was told yesterday.

Investigators spent months building a case against wheelchair- user Lee Fawcett, who represented his country as a member of the UK fencing team at the Beijing Olympics.

The disabled sportsman bought luxury cars at a cut price by exploiting a loophole which says a disabled person may purchase a car for their use VAT-free – and sold them on at a huge profit.

In two-and-a-half years he deposited almost £8.1m in his bank account.

As well as his Middlesbrough home, Fawcett was looking to buy a house in Florida for $390,000, had offered $525,000 for another overseas property and had an American timeshare.

Officials who raided his UK home found details of 151 luxury vehicles the 32-year-old had bought cheaply and sold on for profit.

Fawcett was one of a number of people targeted during an operation involving police, the Department for Work and Pensions (DWP) and HM Revenues and Customs.

Code-named Operation Lantern, officials discovered that people had targeted Land Rovers, Bentleys, Maseratis and Lamborghinis, costing up to £120,000.

The transactions meant thousands could be saved in VAT, and those involved could earn thousands in profit on each sale and still undercut the retail price.

Links were established between Fawcett and other members of the Disabled Sports Forum on the internet.

Details of the cars Fawcett traded were not revealed yesterday, but it is known he made £170,000 profit, which customs officials will try to retrieve through the civil courts.

Though the practice seems to be legal, the Government is considering measures to close the apparent loophole in the law, and cut down on such abuses.

Fawcett, from Middlesbrough, was not prosecuted for his trading, but for falsely claiming benefits while he was making his fortune as an executive car dealer.

He was collecting £65 a week in severe disability benefit, but between January 2006 and July last year was “effectively working as a motor trader”, said Megan Rhys, prosecuting.

Ms Rhys told Teesside Crown Court that the profits Fawcett made were huge and he was overpaid a total of £4,764 in benefits during the near-18 months.

The investigation revealed that the loophole operates by wheelchair-users ordering exclusive vehicles, usually available only on a waiting list, and making a minor modification.

The modification – such as adding a knob on the steering wheel – is then removed and the vehicle is sold at an instant profit, while undercutting the showroom retail price.

Investigators found that several suspects in Yorkshire, the North-East and Derbyshire registered up to 60 top specification Range Rovers each in two years, while another, in Merseyside, registered 35.

Fawcett, who was tipped for a medal in the Beijing games in wheelchair fencing, but finished 11th, admitted failing to notify the DWP of a change in his circumstances.

He was given a four-month suspended jail term and ordered to pay £500 court costs and repay the benefit once a restraining order is removed from his assets.

Judge Tony Briggs was told that Fawcett was left paralysed in 1992 following an operation to correct a curvature of the spine.

After rehabilitation, he started coaching a junior football team, and also began playing for wheelchair basketball team the Teesside Lions, in Middlesbrough.

He made the GB Junior team and was selected for Great Britain’s Paralympic squad for Sydney 2000.

He later switched sports to fencing and, within four months, gained national recognition.

The judge told him: “It appears that you have suffered a number of misfortunes in life, and developed a spinal condition that required treatment that unhappily went wrong. It can be said that you have overcome it with very considerable courage and determination, and that I bear in mind.

“The dishonest claiming of benefit is a very widespread matter and means that those honestly entitled to it are put at risk and the overall burden on the taxpayer and the community is one that should not be there, and if it were not, things would be a great deal better and easier for everybody.”

Father-of-three Fawcett, of St Austell Close, Hemlington, said outside court that he regretted what he had done.

His barrister, Harry Bowyer, told the court that Fawcett was one of a number of people who believed they were exploiting a loophole in the law rather than carrying out criminal activity.

Tony McNulty, Minister for Employment and Welfare Reform, said afterwards: “The vast majority of benefits are paid correctly to those who are entitled to them, but we are still determined to tackle both fraud and error in the benefits system.

“There is still a minority who are intent on stealing from the taxpayer.”