A TAXI operator and leading town figure in Chester-le-Street narrowly escaped a prison sentence for selling bogus insurance to drivers.

Peter MacGregor, 64, devised do-it-yourself insurance documents on his home computer and sold them at cheap rates to four fellow taxi drivers in the Chester-le-Street area.

Durham Crown Court heard that the former Army officer and Chester-le-Street crime prevention panel chairman resorted to the scam in a desperate bid to keep his ailing business afloat, at a time when he was unable to drive due to health problems.

It only came to light after one of the drivers was stopped by police and asked to produce his driving documentation.

When he handed over his insurance certificate, supposedly an Octavian at Lloyds' policy, police established it was false.

Chris Williamson, prosecuting, said MacGregor made £2,366 from the drivers, who were under the impression they were genuinely insured.

John Temple, mitigating, said they made no net loss, as they have not had to re-insure their vehicles for the period they were on the road under MacGregor's 'cover.'

Mr Temple told the court: "Mr MacGregor didn't gain anything from those he was selling. It was purely to keep his business afloat.

"He's extremely ashamed of his actions and he's extremely remorseful. It's had a catastrophic effect on his family.

"He is nearly 65 and of previous impeccable character, sitting on various civic committees, and previously an Army officer who was medically retired due to injuries suffered in Northern Ireland."

Mr Temple added that MacGregor has an inner ear ailment, suffers epilepsy and has to take a wide range of medication.

MacGregor, of Angus, in Ouston, admitted ten charges of using a document with intent to deceive at a previous hearing.

Imposing a 120-hour community punishment order, Judge George Moorhouse told him: "Extremely serious consequences would have followed if one of these drivers had been involved in an accident.

"I've read exemplary references on you and you have an excellent Army record.

"I consider these offences so serious to justify passing a custodial sentence, but I'm prepared to take a risk in this case."