Aristocrat blew £1.6m of family's charity on living the high life

Two-year suspended sentence for former investment banker

A wealthy aristocrat, who used a family charity as his personal piggy bank, frittering away £1.6m, was given a two-year suspended sentence yesterday. The Hon Jonathan Davies, 65, blew money intended for Bosnian orphans on fine wines, golf club memberships and a friend's spark-plug invention.

Describing the theft from a charity set up by his Victorian philanthropist grandfather, Lord Davies, the first Baron Davies of Llandinam, as an "extraordinary exhibition of arrogance", Judge James Wadsworth QC sentenced Davies to two years in jail but suspended the term because of his poor health.

Southwark Crown Court heard how the Old Etonian plundered the account behind his family's back. The bulk of the money – £1m – was ploughed into an invention by his friend, Joe Dawson, explicitly against his fellow trustees' wishes. The rest was used to fund gifts or pay tax demands, a daughter's school fees, credit card and utility bills.

The former investment banker – married to Veronica, daughter of the late Sir William Godfrey Agnew, a clerk of the Privy Council – pleaded guilty to 10 counts of theft involving £232,000 between 24 July 1999 and 14 June 2000. Nineteen other theft charges he had denied were left to lie on file. The court was told that the father of six, who became secretary of the Dinam Charity in 1995, had taken a total of £1,656,143.

Davies sat with his head bowed as the judge said: "You knew ... that the trustees were well aware of [inventor] Mr Dawson's business affairs and research and were of the very strong view not a penny of the charitable funds should go into it. It was an extraordinary exhibition of arrogance on your part that you decided to deliberately override the wishes of the trustees."

The judge said that although he was "satisfied that the proper sentence is of the order of three to four years' imprisonment", he had decided to suspend the two-year term for two years because of Davies' guilty pleas, the fact it was "immensely unlikely you will commit another offence of dishonesty", and because of his poor health.

Stephen Leslie QC, prosecuting, told the court: "Many of us dream of having a bottomless piggy bank full of money that we can dip into whenever we need to solve our financial troubles... For most of us it remains just that, a dream... Not so for Jonathan Davies."

The barrister said the charity's AGM on 24 February 2000 turned sour over concerns raised by one of his relatives, and the trustees were horrified when Davies confessed to the £1m spark-plug handout. An inquiry revealed he had systematically taken money, at one point convincing an elderly aunt to counter-sign blank cheques.

David Huw Williams QC, mitigating, said his client had suffered heart problems since the unmasking of the fraud, his reputation had been destroyed and he had been declared bankrupt in 2003, forcing him and his wife to move into a "humble" flat in Balham, south-west London, borrowed from friends.

The Dinam Charity was set up in 1926 by the first Baron Davies, a wealthy industrialist and Liberal MP, to provide help to the world's needy. Outside court, Detective Sergeant Richard Ward, of the Metropolitan Police's private sector fraud team, said: "It is really sad that the greed of Jonathan Davies has meant that a fund set up by his grandfather in order to invest millions so that charitable causes could benefit from the profits is now in the process of being wound up."