A certified accountant has been jailed after pleading guilty to defrauding investors of £8m in a bid to prop up his ailing family firearms business.

57-year-old Andrew Donald Litt, of Newport, South Wales, was a director of D J Litt (Firearms) Limited, which dealt in sporting firearms and accessories. It also stored and maintained guns for clients.

The Serious Fraud Office (SFO) said that between January 2004 and May 2008, Litt was in serious financial difficulty. He persuaded a large number of investors to 'loan' him monies on the basis that it would be returned with interest of up to 40%.

Litt told investors their money would be used to buy high quality firearms and sold on for a high profit which would be split between them.

In reality, the loans were used to repay earlier investors; in effect a 'Ponzi' scheme.

Some £57.5m in loans and investments were raised by Litt, with around £8.2m effectively 'lost' to them.

At Cardiff Crown Court, Litt admitted to knowingly carrying on the business of D J Litt with the intent to defraud creditors.

He was sentenced to 32 months' imprisonment on one count and 16 months' on the second to run concurrently. He was also disqualified from acting as a company director for five years.

In passing sentence, Patrick Curran QC, took into consideration that Litt had assisted the investigation, that it was not a fraud from the start and that the defendant's actions were not motivated by personal gain but were prompted by a desire to keep the company going.

Litt also admitted falsifying cash books and end of year accounts, falsifying company documents relating to the affairs of the company in order to induce investment, cross-firing of bank cheques, and disposing of a firearms, or retaining the proceeds of sale of firearms belonging to clients who had entrusted those guns to him.