THE son of magician Paul Daniels has been left penniless after being caught carrying out a sophisticated £12,500 fraud against the NHS.

Gary Daniels, who has since lost his job and his home, is now living with his father and stepmother, Debbie McGee, at their £2.5m home beside the Thames.

The 40-year-old was spared prison yesterday after a judge was told he will use his savings to repay the taxpayers’ money he stole.

A bank account containing £10,500 from the sale of his home is all that Daniels has – apart from a ten-year-old car worth £800.

However, Teesside Crown Court was told that an investigation into his activities by the NHS counter-fraud service cost nearly £20,000, which was met by the hospital trust.

Daniels worked as a client support manager in the information and communication technology department for the South Tees Hospitals NHS Trust, which runs hospitals on Teesside and North Yorkshire.

In a sophisticated fraud, he commissioned work through an unsuspecting company and offered to carry it out himself as a sub-contractor for them.

The firm would invoice the trust, take a small percentage when the bill was paid, and pay Daniels – not knowing that the work was never carried out.

Trust bosses became suspicious about Daniels’ activities in July 2007 and, after an investigation, two further attempts to claim £4,993 and £2,643 were blocked.

When Daniels was arrested at his home in Chaldron Way, Eaglescliffe, near Stockton, he told police: “Oh, this is a bit of a shock to me.”

It later emerged that he started the scam after being left with credit card debts and mortgage arrears of £30,000 after a failed relationship.

Peter Wishlade, mitigating, said: “His outgoings far outweighed the salary he had, and he found himself spiralling deeper and deeper into debt. The money that was obtained was applied to reduce the credit card debts.

“He did not, because of pride, involve his father in any way, shape or form, in the matter. He didn’t approach him, and fell foul of the law.

“He is utterly ashamed of himself because he feels, quite rightly, that he has brought disgrace upon himself and, indeed, his family.”

The court heard Daniels is now living with his 70-yearold father, who was born in South Bank, Middlesbrough, and Ms McGee, 50, at their Berkshire home.

Daniels, who is working nine hours a week as a fitness instructor in Gloucestershire, admitted two charges of furnishing false information, in July and September 2006, and fraud between January and December 2007.

Recorder Andrew Kershaw imposed an eight-month prison sentence, suspended for 18 months, with 12 months of supervision.

He also ordered Daniels to pay £10,057 compensation to the trust and a token £500 costs.

The judge told him: “Systematic fraud supported by forged documents, resulting in that level of loss, by a trusted manager is so serious that only a custodial sentence can be justified.

“What appears to lie behind your gross errors of judgement and dishonesty was the breakdown of a relationship of which you had high hopes, but which left you with substantial debts, and you attempted to buy your way out of trouble by using what, in the end, is taxpayers’ money.

“I take into account also your plea of guilty and the efforts you have made to turn your life around and make recompense, which involved selling your home, going to live with your father and stepmother in a different part of the country and trying to resurrect your career as a fitness instructor which will be a difficult path to follow, coming as you do from a secure, publicly- funded employer.”

James Kemp, prosecuting, said Daniels rose through the ranks after joining the trust in 1993 and landed his well-paid ICT job in 2005.

The position gave Daniels an enormous amount of autonomy and allowed him to sign off contracts up to the value of £5,000. He made £10,057 from the scam, and the loss to the trust was £12,445.

Trust chief executive Simon Pleydell said: “Fraud against the NHS impacts on all of us and takes money away from where it is needed most. The public has a right to expect that people working for the health service in positions of trust are honest and that fraud in any form will not be tolerated.

“We take this issue very seriously and will work closely with the counter-fraud service to investigate concerns and seek redress through the courts where necessary.”