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Jail for £300k Dundee fraudster who went on run for 10 months

Nazir Daud has finally been brought to justice after being found guilty last year.

Nazir Daud.
Nazir Daud.

A major fraudster from Dundee has been jailed after going on the run before his trial more than a year ago.

A judge issued a warrant for Nazir Daud’s arrest in December 2022 after he was found guilty in his absence at Leicester Crown Court of selling fraudulent franchise licenses to victims across the UK.

He was arrested on October 25 last year and remanded to await sentencing.

Daud, formerly of Landseer Road, Leicester, appeared in court on Wednesday and Judge Ebrahim Mooncey jailed him for four years and banned from being the director of any company for 15 years.

The 59-year-old was also ordered to pay prosecution costs of £30,046 and his company, Payrolls Direct Ltd, was fined £973,000.

The prosecution against Daud was brought following a probe by Leicestershire County Council’s trading standards team, which received statements from 18 victims.

Daud, who was brought up in Dundee, was thought to have earned more than £300,000 in franchise licence fees.

Although the search for him had involved Police Scotland, he was eventually traced in Leicestershire.

Fraud Scheme

Leicester Crown Court heard previously Daud was the sole director of Payrolls Direct Limited, which he set up in 2014.

He had advertised franchise licences for a new cloud-based payrolls system, which he was selling for between £5,995 and £9,995.

Franchisees would sign up clients and process payroll for each employee of participating companies and Payrolls Direct would take 20% of the fee, with the franchisee keeping the rest.

Nazir Daud
Nazir Daud. Image: Leicestershire County Council.

Daud claimed buying a franchise licence would allow people to earn between £250 and £2,000 per month, depending on how much time they put into the business and how many clients they signed up.

Advertising for Payrolls Direct also promised franchisees initial training, ongoing unlimited support, marketing materials and networking opportunities with successful franchisees.

However, the court heard just one of 18 franchisees who spoke to trading standards during the investigation was able to sign up any clients, with promised help and training not provided and leaving them unable to use the payrolls system.

This led to the contract with clients being terminated.

Shattered dreams

Daud was convicted of three counts under the Fraud Act 2006 in relation to false representations made between 2015 and 2018, and a further charge of fraudulent trading under the Companies Act 2006.

In all, the cash value of the fraud was put at more than £320,000, with witnesses describing further “out of pocket” losses, including thousands of pounds spent on advertising and months of work spent fruitlessly working to gain clients.

Leicester Crown Court
Leicester Crown Court. Image: Google.

Harpreet Giani, representing Daud, said Payrolls Direct was originally conceived as a legitimate company but it spiralled out of control.

He said: “Mr Daud wants to come clean now.

“He understands he’s probably going to receive a long prison sentence.”

Passing sentence, the judge said: “A lot of people had dreams of making it work.

“They invested a lot of time and made decisions that affected their families.

“It wasn’t just a monetary value.”

Second man

Co-defendant Anthony Raybould was the first franchise licence holder but began working as a salesperson for Payrolls Direct, with the council saying he made false representations to victims about his earnings and having many clients.

He pled guilty to false representation under the Fraud Act 2006 and fraudulent trading under the Companies Act 2006.

The court heard Raybould earned in excess of £10,000 in commission payments.

He was given a 22-month suspended sentence for two years.

Impact on vulnerable people

A source close to the case told The Courier previously that vulnerable single mothers, an ex-military man and young people starting out in their careers were among those swindled by Daud.

The court was told how many of the victims had taken out loans to pay for the initial franchise fee or used life savings.

Some had fallen into debt, given up their own employment and seen their mental health severely affected.

Following the sentencing, head of Leicestershire County Council trading standards service, Gary Connors, said: “This form of fraud provides a quick financial return for the perpetrators, leaving the victims in financial and emotional turmoil.

“The franchise sector is heavily reliant on trust rather than regulatory controls and by nature potential new entrepreneurs must be persuaded to make a significant ‘down payment’ for the promise of financial success.

“These are often complex and resource intensive investigations, but the legitimate UK franchise industry is a major contributor to the UK economy and must not be undermined by this form of fraud operating within the sector.”

Dundee links

Daud created a business called Citylocal in Dundee in 2006.

An article from the time says he wanted to create a website providing information about tourism, entertainment, businesses, dating and the weather in Dundee – and that plans were underway to repeat the format in a “franchise operation around the world”.

In the same year, the BBC reported Daud’s launch of a mobile phone text messaging service which aimed to boost the quality of life for Muslims.

The article says the service, for which Daud charged £15 a month, sent daily uplifting messages to “spiritually enlighten” its users.

Users would be able to receive a host of different services, including messages from the Koran and daily prayers.

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