The founder of a flagship free school has been jailed for five years for defrauding the Department for Education of thousands of pounds from Government grants.

Sajid Hussain Raza, 43, was jailed at Leeds Crown Court with former academy staff members Daud Khan and Shabana Hussain, who were sentenced to 14 months and six months respectively.

The trio was convicted in August of making payments into their own bank accounts from grants given to help set up the Kings Science Academy in Bradford in 2011.

Judge Christopher Batty told the defendants after a six-week trial: "You have been convicted of serious offences and I am very much considering custody in each of your cases."

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The fraudulent activity, which totalled £69,000, continued for three years, between November 2010 and December 2013.

In March 2012, the academy was praised by then prime minister David Cameron during a high-profile visit.

Jailing the three defendants, Judge Christopher Batty said: "The three of you were convicted by the jury of a number of counts relating to your dishonest dealings with public money during the periods when you were setting up the Kings Science Academy and, in your case Sajid Raza and Daud Khan, also in the first 15 months of its operation."

Judge Batty said free schools were part of the Conservative Party's 2010 manifesto to allow flexibility and specialism within education and to allow children to be taught in ways not catered for in the current education system.

He said: "They are called free schools because of the way they were set up, entrusted with funds as a trust, a non-profit making organisation. They were set up to educate children. They were not set up to be a vehicle for making money by those who ran them."

Raza made the application for the 500-place secondary school to open in September 2011.

The proposal was approved and grants were given by the Department for Education to cover the costs incurred during the setting up of the school.

The court heard that Raza and his sister Hussain, a teacher at the school, made a series of payments into their own personal bank accounts from these grants.

Khan, the financial director, did not receive any payments but the court heard the fraud could not have taken place without his participation.

Raza and Khan also submitted inflated or fabricated invoices for rent, fees for heads of department and recruitment services.

The trial heard that Raza, the founder and principal of the Lidget Green school, used some of the money to make mortgage repayments on rental properties he owned to alleviate his own financial problems.

He had ten county court judgments against him by August 2013 and was making a £10,000-a-year loss on his rental properties.

Benjamin Hargreaves, mitigating for Raza, said his client's motivation was "entirely genuine" and Judge Batty said he believed the defendant did not set up the academy with the intention of fraud.

But he told him: "This school may well have been the thing you always wanted to pursue but you also wanted money. Making money was important to you because of the school and because of the debt around your neck."

He added: "In the end, it was this exposure to debt that probably drove the offending in relation to the Kings Science Academy frauds."

Raza could draw a salary of £75,000 as principal of the academy but Judge Batty said it was "not enough to deal with the debts that you had".

The judge told the sentencing hearing that the defendants were entitled to some of the money from the grants for work they completed but ruled that Raza and Khan had both fraudulently obtained £69,000, while Hussain fraudulently received £13,000.

Judge Batty told Raza he lacked the experience needed to run a school.

He described him as "arrogant" and said he refused to take advice from others, threatening to go to then education secretary Michael Gove when challenged by one senior civil servant.

He said: "You were out of your depth and sought to use public money to enrich yourself."

He added: "This was not incompetence. This was dishonesty at work."

The judge said Raza was the "driving force" behind the fraud but could not have done it without finance director Khan.

He told Khan: "You are not a strong and forceful personality. Sajid Raza was very much the dominant force. He called the shots. He brought pressure to bear upon you to comply with his wishes."

He added: "You played a vital role in the defrauding of the money for providing an education for the children of this country.

"You could have walked away but you chose to stay for the best part of 19 months and these practices continued with your compliance throughout."

The court heard that Hussain left a job abroad to support her brother in setting up the academy.

The judge said Hussain submitted a number of false invoices, including claiming for 82 days work during one month.

He told her: "You undoubtedly did some work but it was significantly less than that which you claimed to have done."

Raza, Spring Gardens Road, Heaton, Bradford, was jailed for a total of five years for four counts of fraud, three counts of false accounting and two counts of obtaining money by deception, relating to lying about his income on mortgage application forms.

Hussain, 40, of Wilmer Road, Heaton, Bradford, was jailed for six months for one count of fraud and one count of obtaining property by deception.

Khan, 45, of Thornhill Place, Thornbury, was jailed for 14 months for two counts of fraud and three counts of false accounting.

After the case, Senior Investigating Officer, Detective Superintendent Jon Morgan, said: “We are pleased with the sentences which have been passed today and hope these may deter others from committing similar offences in the future.

"I would again like to thank everyone who has worked on this investigation which uncovered the unscrupulous activities of Raza, Hussain and Khan and brought them to justice."

Councillor David Ward (Lib Dem) is the former MP for Bradford East, and had raised numerous questions about Kings Science Academy in Parliament when the scandal broke.

Today he said: "You reap what you sow." 

Referring to the length of time it took for the trio to be charged after the fraud was uncovered, he said: "The real tragedy is that it took so much effort, so much chasing and so much pressure to get the Department for Education and the police to take this seriously.

"It was obvious very early on that a crime had been committed. 

"Raza was a man who had David Cameron's personal phone number on his list of contacts, and who thought he could do what he wanted and still be protected by Michael Gove and the Prime Minister.

"When I was pursuing this there were a lot of parents at the school who were defending him, and I was under a lot of pressure to keep a lid on it and 'stop picking on him.'"

A Department for Education spokesman said: “All academies operate under a strict system of oversight and accountability – more robust than in council-run schools – ensuring any serious issues including financial mismanagement are identified quickly and dealt with efficiently.

“In this case, the Education Funding Agency acted as soon as allegations were made and, thanks to that swift action, all inappropriately used departmental funds were recovered.”

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