Fraudster claimed amnesia when confronted by police

Steven Calderbank, 46, of Nelson, Lancashire told police he could not even recall being employed by Manchester-based Skills Solutions when he was arrested after the three-year fraud was uncovered.

He was jailed for 26 months after stealing the money and spending it on home improvements and a new car.

Some 220,000 of the cash taken from a Government-backed company had still not been traced.

However, doctors found no evidence his "illness" was genuine as Judge Beverley Lunt ruled he was driven purely by greed.

The father-of-three had complete access to the accounts of the not-for-profit organisation which distributes funding for school and college apprenticeships, with an annual turnover of 10 million.

Between September 2004 and January 2008 he systematically paid shadow invoices into his own bank account and his deeds were not uncovered until an internal audit.

Calderbank pleaded guilty to 20 specimen counts of theft at an earlier hearing and asked for 18 similar offences to be taken into consideration

Hugh McKee, prosecuting, said: "He told his wife he was under pressure because of the audit and she then gave him an ultimatum to explain how he had got the money to pay for a 60,000 extension to the house."

Sums of 15,000 each were also spent on a new conservatory and car, the prosecutor added.

He then left a note to his wife stating he had left home and gone to London. She reported him to the police as missing and he finally returned six days later when he was arrested.

His wife, who had been seriously ill since 2000 and died last January, was also detained as part of the inquiry before she was released without charge.

When interviewed, Calderbank said he had lost his memory and could not recollect working at Skills Solutions or stealing the money, but he did remember his teenage children growing up.

Mr McKee said: "The defendant's offences have had a detrimental affect on his colleagues. They feel let down and feel it reflects badly upon them."

A thorough financial probe was undertaken to determine where the money was spent but it only revealed the three sizeable purchases.

"It is something of a mystery still as to where much of the money has gone," added Mr McKee.

Mark Stuart, defending, said: "His only explanation is that he must have spent it on the house, the kids, the wife and their general living."

His teacher wife was forced to leave her job because of her illness and the investment into the house by Calderbank may have been a form of "nestbuilding" ahead of when she died, he said.

The offences were not sophisticated, Mr Stuart added.

"As soon as there was an investigation it was bound to fall upon him," he said.

Calderbank had suffered from multiple sclerosis for some time, was diagnosed as a mild depressive and was the sole carer of his children, who were in court along with his own parents.

Mr Stuart said: "He cannot have done things more wrong from their point of view but all are completely supportive of him."

He pleaded for either a suspended jail term or a short spell in prison as he outlined that the children had lost their mother, were about to lose their father to prison and faced the sale of the family home as part of a proceeds of crime hearing.

Judge Lunt said she was sorry for the children but the extent of the theft could only lead to a custodial sentence.

"There was no evidence of any financial obligations or debts that may have driven you to commit these offences. The only thing that has driven you is greed," she said.

"This was not a sophisticated fraud but on the other hand you have also managed to make money disappear without trace."