Camden Council is thought to have become one of the first local authorities to prosecute successfully a council tenant for housing fraud under the Fraud Act, after he unlawfully sublet his council property.

Oladapo Talabi was prosecuted under sections 1 and 3 of the Act for failing to disclose information to make a gain and exposing the council to loss.

He had been granted a secure tenancy in January 2008 because of overcrowding at the family home.

However, from September 2010 Talabi rented out the property for approximately six months for the sum of £780 per calendar month.

He received a lump sum of £4,000 from the estate agent who handled the letting on his behalf.

Talabi was charged after an investigation by Camden’s housing investigation team. On 1 September 2011 he pleaded guilty at Highbury Magistrates Court to two counts of fraud.

At a hearing on 26 October 2011 District Judge Henderson concluded that Talabi had used the rental income to pay off his debts, particularly his rent arrears.

Rather than send him to prison, the judge therefore gave Talabi a Community Order of 12 months comprising 100 hours unpaid work. Camden had already been awarded costs of £750.

Possession proceedings for the property are listed to be heard at Central London County Court in December 2011.

Camden said the case was significant from a legal standpoint because the Fraud Act had been used solely on the grounds of subletting, "which is something new".

“We hope to be able to enforce this type of prosecution more widely in the future both as a deterrent and in the interests of justice,” it said.

Cllr Julian Fulbrook, Camden’s Member for Housing, said: "This sends an extremely clear message: illegally subletting your council home is a criminal matter and anyone found doing this will be dealt with by the courts.

"At a time when we are facing severe funding cuts and a long council homes waiting list, it is sickening to see people abuse the system in this way. I hope this sends a warning that illegal subletting will not be tolerated by Camden.”