Insurance bosses jailed for hiding £250m loss in one of Britain's 'worst commercial disasters'

Michael Bright, 63, the former chief executive of Independent Insurance, was given the maximum seven years behind bars for leading the scam.

Independent's former finance chief Dennis Lomas, 56, was given four years in jail and managing director Philip Condon, 58, got three years for conspiracy to defraud.

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A jury heard how the trio hid the firm's financial problems from investors, including making claims the company had made a £22million profit when in fact it had made a loss of at least £180million.

The fraud has cost the taxpayer almost £370million - the total paid out to policyholders in compensation by the Financial Services Authority after the insurer went bust.

Judge Geoffrey Rivlin said Bright was the 'architect' of the fraud that concealed millions in losses from

investors and Independent's own auditor, Watson Wyatt.

He told Southwark Crown Court in London that Bright had 'infected' the company with a 'truly serious disease' that ended with the collapse of Independent in June 2001.

Only the year before Independent had a market value of £1billion and was hailed as the darling of the City.

The court heard how the three men manipulated Independent's accounts in 1999 and 2000 to show a profit when, in fact, they should have shown cumulative losses of £250million.

Judge Rivlin added: "The seriousness and the huge scale of this offending is such that possibly it goes altogether beyond the scope of anything Parliament had in mind when fixing the sentence for this offence, possibly by a factor of several times."

Before the firm was ruined, all three bosses were living extravagantly with enormous salaries.

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Bright was on £1.65million, Condon earned £925,000, and Lomas was pocketing £309,000.

But the three now stand to lose everything, including their pensions, as the court has convened a confiscation hearing in February.

Bright, who wept in the witness box during the hearing, lost £55million in shares in the collapse, had to sell two of his four homes, and declared himself bankrupt.

But he still owns two homes, one in Spain and one in Kent, because they are in his wife's name.

These homes are now likely to be seized by the Serious Fraud Office.

He has also hung on to a £3million pension pot.

Before his demise Bright hosted lavish parties with fine wine at his sprawling London flat overlooking Tower Bridge. He drove a red E-type Jaguar.

His sentence is one of the most severe penalties ever imposed on a high-profile company boss for white collar crime in Britain.

Independent's collapse left more than 1,000 staff without jobs, and some even lost their investments in the company through sharesave schemes.

The shareholders lost everything.

The firm's policyholders included the London Fire Brigade, Pizza Express, the Oval cricket ground, Somerfield supermarkets and the McLaren Formula One racing team.

Judge Rivlin described Bright as an overbearing bully, who manipulated his co-workers by introducing 'a fear factor into the working lives of your managers'.

He added: "The truth is you corrupted a lot of people along the way."