John Reynolds, Lord Provost of Aberdeen, twice lost money using bogus travel agencies totalling more than £3,000.
On Tuesday Southwark Crown Court heard he first booked a holiday for himself and six others to Girona, Spain, in October 2004.
But a few weeks after paying out an initial £500, Ciao Travel Ltd, the company Mr Reynolds booked with, effectively disappeared.
He gave evidence in court in the case of Evangelia Liogka of Montpelier Place, Knightsbridge, Christakis Philippou of Bark Place, Bayswater and Timothy Entwisle of Ludworth in Dorset who have denied five counts of conspiracy to defraud. Peter Kemp, who managed the day-to-day running of the businesses, has pleaded guilty to the same charges.
Prosecutors said the group set up five travel agencies in London where they sold large volumes of discounted holidays before collapsing the businesses.
The agencies said to be involved are Ciao Travel Ltd trading as Sun, Onshine Ltd trading as Sunsplash, Grayrise Associates Ltd trading as Elite Travel, Orange Sun Ltd trading as holidays4under200pounds.com and unbeatableholidays.com and Sun Orient Ltd trading as sunmedresorts.com.
Prosecutor Martin Edmunds QC told the court: “When the company went down he [Mr Reynolds] attempted to confirm with the airline and hotel and was unable to do so.”
When investigators from ABTA called at Ciao Travel Ltd’s premises, all they found was an abandoned office with no contact details.
Mr Reynolds then decided to book a new holiday with a different travel agency Onshine. He paid out £2,800 for a group trip to Heraklion, Crete only to be dissapoointed again.
Mr Edmunds said a Civil Aviation Authority official, who visited Onshine’s office from time to time, was “alarmed” to find “little evidence of a proper travel business being operated” and, as a result, the company’s ATOL licence was suspended and it ceased trading.
Fortunately, Mr Reynolds had made both payments by credit card and was reimbursed by the lender.
The trial is expected to continue for eight weeks.