The former owner of Norton Motorcycles - Stuart James Garner - has been given an eight month suspended prison sentence for illegally investing pension schemes’ money into his business.

The 53-year-old was sole trustee of the three pensions schemes which invested in Norton Motorcycles.

He was prosecuted by The Pensions Regulator (TPR) and will be forced to pay redress after a shortfall of £10m was found.

Mr Garner, of Park Lane, Castle Donington, Derby was sentenced this week to eight months imprisonment, suspended for two years, for each of three counts of breaching employer-related investment (ERI) rules. 

He was also disqualified from acting as a company director for three years and ordered to pay TPR’s costs of £20,716. 

Last month, he pleaded guilty to three charges of breaching ERI rules by investing most of the money of each scheme into his business, Norton Motorcycle Holdings Ltd. 

Derby Crown Court heard how the offences related to three defined contribution schemes: Dominator 2012, Commando 2012 and Donington MC. 

The three pension schemes were left with a shortfall of approximately £10 million. 

The investments, made between 2012 and 2013, were made in return for preference shares. The shares were issued by Norton Motorcycle Holdings Ltd for which Mr Garner was both the director and majority shareholder.  

In her ruling, Her Honour Judge Nirmal Shant, told Mr Garner that while she had given him full credit for his early guilty pleas, his actions had been reckless and caused profound harm to his victims - both financially and to their mental wellbeing, as well as damaging their confidence in pension saving.

She added that Mr Garner’s victims had reported problems sleeping, relationship difficulties and some now faced the prospect of having to work longer than they had expected because of his crimes. 

Judge Shant said: “This is not just financial harm. I have read statement after statement on the damage you have done to the people involved.” 

Nicola Parish, executive director of Frontline Regulation at TPR, said: “Despite being an experienced businessman, Stuart Garner illegally took money from three pension schemes in his care to prop up his struggling business.

“As a result of Mr Garner’s criminality, savers, whose interests he was supposed to safeguard as a trustee, have been affected by substantial financial losses to their retirement savings and have been caused significant distress. It is only the right he is punished for this. 

“Rules on employer-related investments are vital to protect members’ savings, and as this case proves, we will take action against those who flout them. Trustees must have full knowledge and understanding of the restrictions which apply to pension scheme investments. Trustees may face prosecution or regulatory action if they fail to abide by those restrictions.”

The Pensions Ombudsman has ordered Mr Garner to repay the shortfall less money already recovered, plus interest. 

The independent trustee firm appointed by TPR to the three schemes pursued Mr Garner for the losses which has resulted in his personal bankruptcy. 

Insolvency practitioners for Norton Motorcycles Ltd are investigating how much money may be passed to the scheme following the eventual liquidation of the Norton companies.