A drugs lord laundered some of the £42m profits made through dealing by involvement in mortgage fraud.
Michael Watts is currently serving his second, decade-long sentence for his high level role in the narcotics trade.
You are an out and out criminal and drug dealer. You are serving ten years, You are responsible for your wife being here, there is no doubt about that. You should hang your head in shame.Judge Sean Morris
When specialist detectives delved into his financial background, they uncovered a mortgage fraud involving him and his associates worth over a million and a half pounds.
The dealer, of Bede Burn Road, Jarrow, had used some of the drugs money to invest in properties, which prosecutors now aim to seize from him under the Proceeds of Crime Act.
Prosecutor Paul Cleasby told Newcastle Crown Court: “There is evidence of him using large sums of money to purchase property.
“He was using the proceeds of his drug offending in this way.”
The 48-year-old and his associates had lied on application forms and provided forged documents to secure huge loans they would not otherwise have been entitled to.
His wife Pamela Watts, of the same address, was roped into the fraud scam by her husband, who a judge said was using the fraud to “get rid of drugs proceeds”.
Watts was sentenced to ten years behind bars in September last year over conspiracy to supply amphetamine after a £55m haul was recovered from a drugs ring making “astronomical” profits.
Judge Sean Morris sentenced him to 18 months yesterday for the mortgage fraud, which he admitted.
The judge told him: “You are an out and out criminal and drug dealer. You are serving ten years, You are responsible for your wife being here, there is no doubt about that.
“You should hang your head in shame.”
Pamela Watts, who admitted involvement in giving false details for a £80,000 loan, was sentenced to a community order for 12 months with 250 hours unpaid work.
The court heard the 48-year-old mum has kept her family afloat, gone out to work, paid bills and taken care of her children during her husband’s long jail terms.
She admitted mortgage fraud.
Mr Cleasby told court heard a major financial investigation was launched after Watt’s incarceration last year.
Watts, who had obtained £10,000 per year work at a garage after being released from his last long prison sentence, had claimed on mortgage application forms to be his company’s manager, earning many times his actual pay.
Through the fraud, he obtained loans for a £138,000 property in Hebburn, another £144,500 house, a £240,000 loan to buy the family home in Jarrow and a joint £252,000 loan with associate Jeffrey Holliday.
Holliday, who has never been in trouble before and has a seriously ill wife, obtained two further £250,000 loans, to buy his own home and another property, by exaggerating his earnings.
The 65-year-old, of Landfall Drive, Hebburn, admitted mortgage fraud and was sentenced to 10 months imprisonment, suspended for 18 months with 300 hours unpaid work.
Watt’s business partner Thomas Armstrong, 50, and his wife Beverley, 48, who own their own businesses, obtained a £446,250 remortgage on their family home, using false figures.
They admitted mortgage fraud and were sentenced to 10 moths imprisonment, suspended for 18 months, with 300 hours upaid work.
The court heard the couple, of Pine Grange, Morpeth, invested over £200,000 with Watts in a business enterprise, using the cash they raised, and it was never seen again.
All of the mortgages taken out during the frauds, which date back as far as 2006, have been kept up to date and none of the financial institutions involved have actually lost any money.
None of the defendants have been in any further trouble since the frauds.
Judge Morris told them: “As a result of a side wind into the investigation into Michael Watts, some pretty diligent and deft footwork by the police uncovered a mortgage fraud.
“This goes back many years.”
The judge said the guilty pleas, passage of time, lack of previous convictions and the fact none of the defendants made a profit in the scam meant the jail terms could be suspended.
Judge Morris added: “There were no pots of gold at the end of this rainbow.”
The judge said immediate jail terms would usually follow for offences involving such mortgage frauds.