Edward Tully first met Allen Skolnick, who was based in the US, in the 1980s. A trial at the Inner London Crown Court heard that between January 2005 and July 2011, Tully was given an increasing level of responsibility for Skolnick’s UK business interests in three companies: CAMBR Ltd, Cedarcoast Ltd and Fenstead Ltd.

During this period, the court was told, Tully processed unauthorised payments by writing out cheques and transferring funds from the company accounts to his own personal account or to third parties for personal items and services.

This money was used to fund a luxury lifestyle which included building his own house, financial support for his accountancy practice, renovations to a hotel and general cash to support him. During this period Skolnick had made several requests to Tully for funds to be transferred from one of the company’s UK accounts into an account in the US, but this never happened.

In a phone call that was recorded by Skolnick in July 2011, Tully admitted that he had taken and used money from the companies for his own personal use. Skolnick died in April 2013 having tried to recover the money amicably from Tully, and the fraud was subsequently reported to the City of London Police in July 2014 by his UK legal representatives.

The police investigation found unauthorised cheque payments totalling £4,130,808 and additional transfers from accounts totalling £949,893. Mortgage payments were left unpaid and the property development owned by Skolnick was repossessed, although Tully led Skolnick to believe the apartments had been sold or let. This was all despite Tully’s claims that he would eventually pay back the money he had taken.

Detective Sergeant Lee Nelson of City of London Police said: ‘Tully lied to his friend of 25 years to cover up the sheer scale of his crimes. He only admitted his guilt when faced with no alternative.

‘This was a crime driven by greed in which Tully took advantage of his friendship with Mr Skolnick and his position of trust as an accountant. We hope that today’s sentence serves as a warning to those who abuse their positions to commit fraud. This is justice that sadly Mr Skolnick will never know.’

Previously, in 2014, Tully was disqualified from being a company director for eight years after an Insolvency Service investigation found he had failed to pay some £158,000 of VAT, PAYE or National Insurance contributions (NICs) for three years in connected with a service company he set up to supply goods and services to the Slepe Hall Hotel in St Ives, Cambridgeshire, which he owned.

An ICAEW disciplinary hearing in December 2015 which followed on from this disqualification heard that Tully had initially failed to supply any accounts or records to the official receiver after the hotel went into administration in 2010.

Subsequent investigations found the records that were handed over were deficient as there were no books of prime entry; they contained a printout of nominal ledger from TAS Books accounting system but no backup discs; there were no sales invoices in records; no purchase invoices after June 2008; no VAT records after 2008; no bank records after 2008; no cheque book stubs or paying in book stubs; and no correspondence files after 2008.

The ICAEW tribunal found that that Tully’s conduct whilst director of the company brought discredit on himself, the institute and the profession of accountancy. He had neglected the company’s tax and VAT affairs for the entire period of the company trading, and had attempted to avoid the company being wound up by submitting the day before the winding up order VAT repayment claims which the HMRC subsequently could not verify due to lack of evidence.