A commercial manager of a bank that was the victim of a £175,000 invoice factoring fraud told a court that he was duped by two men who he met to discuss investing in a recruitment business.

Kevan Mugleston, a commercial manager at HSBC based in Boston, Lincolnshire, told Southwark Crown Court that a man introduced to him as Tim Hench and another man Alan Baker “passed the common sense test”.

Mugleston told the court he also carried out identification and verification of address checks, but that he did not become aware “for a considerable time” that the man introduced to him as Tim Hench was in fact Tim Baker, and that Alan Baker was Tim Baker’s father.

In May 2009, Timothy Baker, previously of Wolverhampton Road, Walsall, was convicted of two frauds costing HSBC and RBS £700,000 and sentenced to six years in prison.

On Monday, Alan Baker of Lydbury North, Shropshire, pleaded not guilty to charges of money laundering.

Mugleston met Hench and Baker in March 2008 after the owner of Boston, Lincolnshire-based recruiter Allied Staff Management (ASM) told him [Mugleston] that they [Hench and Baker] were interested in buying the business.

Describing the meeting, Mugleston said he found it “strange” that neither of the men had offered him their business cards in return for his own. “It’s usual for cards to be handed over, if only as a further point of contact,” he said.

“It was a considerable time afterwards that I became aware that they were father and son,” said Mugleston.

Earlier Mary Stevens, who owned West Sussex-based Revo Recruitment, told the court that she had no idea about the relationship between the two men.

Stevens said that at a business meeting in the spring of 2008, at which Hench was given a 51% controlling stake in Revo Recruitment, Hench, the man she now knew to be Tim Baker, introduced Alan Baker as “a business adviser that he had known for a number of years”.

“Alan Baker said he was a stone mason by trade, and had done a lot of work for McDonald’s refurbishing the stores,” said Stevens.

Asked whether she had fallen for Hench’s story she said “absolutely, hook, line and sinker”. “He would have been brilliant if he was straight.” 

Stevens said that she only became aware of Tim Hench’s true identity after she was contacted by a police officer who had traced him after seeing a picture of  Tim Baker and Rachael Baker attending the RecruiterAwards for Excellence in 2008, while on bail for an earlier fraud involving RBS.

The trial continues.