The trial of two former recruiters accused of defrauding the Royal Bank of Scotland (RBS) will resume on 20 April after a court heard they allegedly received more than £200,000 each as a result of “fresh air invoicing”.

Stephen Lawrence and Mark Starling, who deny defrauding the bank, then used the money to buy expensive watches, a bathroom suite and a sports car, according to court testimony.

Lawrence and Starling were directors of Quo Vadis Technology Ltd (QVTL), an IT recruiter which placed contractors in temporary and permanent roles.

They had agreed a private invoice discounting facility with RBS in summer 2005, whereby QVTL would invoice the bank sums of money it claimed it was owed by clients, via a computer software system, and the bank would send the money.

RBS became suspicious of the company when it failed to complete its bank reconciliation on time in August 2006. Jonathan Munt, the bank’s customer relationship manager at its Chancery Lane branch, told Southwark Crown Court that when he attended QVTL’s Chelmsford offices on 12 September 2006 he was told to leave after Julie Westwood, the company’s accounts clerk and Lawrence’s sister, said the office was unoccupied and the business had been sold.

As a result of this, the High Court appointed administrators Smith & Williamson on 15 September. Anthony Spicer, an insolvency practitioner, said he visited the company’s offices three days later and saw Lawrence, who advised him that he was a consultant for UCAT Recruitment, a new business operating from the same office.

Spicer added he was “never” given any documents or statements from anyone at QVTL to show how much the company was worth.

Disclosure orders obtained by the administrators revealed that the bank account with Swiss bank Bordier et C was in fact a clearing account — an account which money passes through temporarily before going into another account — for a bank in Geneva, and Spicer said:

“We could see the money going into the Swiss bank account but we could not match them to payments coming out the other side.” He went on to tell the court that invoices raised between July and August 2006 were used to draw down funds, but no money was owed to QVTL by clients, because they were so-called “fresh air invoices”, for which no services had been provided. “They had no merit,” he added.

The court later heard that between 30 July and 18 August 2006, Starling and Lawrence received more than £200,000 each from the Bordier et C account, which was managed by a third party who cannot be named for legal reasons.

Lawrence used part of the money to buy a £19,700 watch, while Starling spent £53,000 on a Porsche sports car, the court was told. The men were arrested on 24 January 2007 on suspicion of conspiracy to defraud RBS. For the defence, Peter Martin told the court that there was a “regular pattern of payments” between December 2005 and August 2006 from RBS based on invoices to which money was owed.