A crooked businessman who cheated the taxman out of almost £500,000 by pocketing deductions from employee wages has been jailed for three years.

Michael Stainer committed the massive fraud over a four-year period while running The Grand on Folkestone seafront and a number of companies operating from the imposing Edwardian building.

A jury at Southwark Crown Court found the 74-year-old guilty of two counts of cheating the public revenue and one of fraud by false representation.

During the trial the court heard how money taken from staff pay-packets and meant for HMRC were simply scooped up by Mr Stainer.

The years-long swindle was said to total £473,097.07, jurors were told.

They also heard how after a visit by revenue officials, Mr Stainer tried to make submissions to HMRC but the company’s PAYE account had been cancelled because of inactivity.

His wife, 60-year-old Doris Stainer, had appeared charged with the same crimes but was found not guilty.

Speaking following the jury's verdict in May, Richard Wilkinson, assistant director of the HMRC fraud investigation service, said: "We welcome today's conviction of Michael Stainer, an employer who was stealing from his own staff.

"Instead of lining his pockets with their stolen tax contributions, this money should have been funding our vital public services, such as hospitals and schools."

Stainer, a chartered accountant, owned The Grand - once a favoured haunt of royalty - for more than 40 years but the couple were forced to step away after being declared bankrupt.

He was jailed for three years at Southwark Crown Court yesterday and disqualified from acting as a director for the same period.

Residents of the building, which is primarily made up of leasehold apartments, last year purchased the former hotel at auction for just £448,000.

In February we revealed their company was facing a "worst case scenario" repair bill of up to £4 million for maintenance on the building, which has fallen into disrepair over the years.

The glass-fronted Palm Court was once the haunt of royalty, with Edward VII and his mistress Alice Keppel known to grace the 'monkey house' - so-called because the locals used to like peering in to see the King and his courtiers, who were heavily bearded.

The residents were able to secure the freehold of The Grand at auction after its previous owner, Hallam Estates, was put into administration.