AN estate agent fraudulently used tenant deposits to ease his own cash flow problems and prop up his failing business.

Simon Cawley, who was a director of Severn Sales and Lettings in Worcester, since dissolved, admitted a single count of fraud after taking £7,640 in deposits and by failing to pass on rent payments.

The 53-year-old, appeared at Worcester Crown Court yesterday (Thursday) where he was spared an immediate jail sentence.

The court heard how Cawley should have placed the deposits, paid by tenants, into a tenancy deposit scheme but that this did not happen.

In many cases landlords, whose lettings he ran, were left out of pocket after having to reimburse the tenants.

The landlords were described by the judge as as having 'done the decent thing' by their tenants even though they never had the deposit money in the first place.

The fraud had six victims at properties in Worcester at Winchester Avenue, The Spinney, Back Lane South, Blakefield Gardens and Malvern Road and took place between January 1, 2013 and February 28, 2015.

Sophie Murray, prosecuting, said: "It seems the financial welfare of the company diminished under Mr Cawley's directorship through mismanagement."

Jason Patel, defending, said Cawley, now of Orchard View, Frogmore, Kingsbridge, Devon, was of previous good character, entering his guilty plea last week at the pre-trial preparation hearing.

He said Cawley had been trading as an estate agent since 1988, setting up his own business in 2004 and rebranding in 2012.

Mr Patel argued that the money for a significant number of houses Cawley rented out was paid into the tenancy deposit scheme.

"He would wholeheartedly accept it was bad management on his part. It was a fine line between bad management and dishonesty," Mr Patel told the court.

Cawley is now living on the Devon coast with his wife of 25 years and does landscape gardening work.

Judge Nicolas Cartwright noted that Cawley had 'never been in trouble before' and gave the defendant a 20 per cent discount in the length of his sentence because he had admitted the fraud.

He said: "As part of your role as a letting agent you were supposed to be taking a deposit of money and putting it into a deposit protection scheme so that, in due course, tenants who didn't have deductions from their deposit could get their money back.

"You used that money in order to ease your own cash flow difficulties, effectively robbing Peter to pay Paul."

The judge told him when his business failed he was unable to pay the money back to the tenants.

He added: "It was left to the landlord to pay back the tenants' deposits despite the fact that landlords had never had the money."You totally ignored your obligation as letting agent to safely ring-fence the deposits in the way you should."

Judge Cartwright said such tenancy deposit schemes were there to protect tenants from unscrupulous landlords or owners who took all or part of a deposit without justification.

He said: "Thankfully no vulnerable tenants lost out in this case, in fact no tenant at all, because the landlords have done the decent thing and paid the deposits back. It was the owners and landlords who lost out.

"The offence easily crosses the custody threshold but I'm going to give you a chance by imposing a suspended sentence."

Cawley was sentenced to nine months in prison suspended for two years. He must pay £700 costs.

It is hoped a 'proceeds of crime' hearing in July this year at Worcester Crown Court will allow those out of pocket to be compensated.