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EnergySainsbury's potato gang jailed for £9m fraud
Filed under: Scams & Fraud
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Matthew Bright/EMPICS Sport
So what was the great potato fraud about?
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Bribes
One of the businessmen was 44 year-old John Maylam, a senior vegetable buyer for Sainsbury's, from Maidstone, Kent, who had spent 20 unblemished years building his career at the grocer. He took a £5 million bribe from a potato supplier, Greenvale, in the form of lavish gifts and luxuries.One of his fellow fraudsters was John Baxter, a 50 year old director of Greenvale from Market Drayton, Shropshire. Greenvale supplies around 50% of the supermarket's potatoes. He massively overcharged Sainsbury's for the crop in a £40 million annual deal - in collusion with Maylam.
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By overcharging, Baxter was able to put the money into a fund that was used to 'thank' Maylam for his business - through two companies set up to disguise the flow of money. The third man appearing in court was Greenvale's finance director Andrew Behagg, 60, from Cambridge, who was complicit in the arrangements.
Spending
The money that was siphoned off was used to fund extraordinary spending. Maylam received a £94,000 top-of-the-range Aston Martin V8 Vantage, and took luxury holidays in Monaco and the South of France. There was also a £200,000 bill at Claridges and cash payments stuffed in brown envelopes. These costs were entered into Greenvale's accounting system as 'team building'.Croydon Crown Court Judge Nicholas Ainley said it was "very nearly as serious a case of corruption as I can imagine".
Baxter and Maylam pleaded guilty, but Behagg denied the charge of corruption, claiming 'extortion'. The court found him guilty.
Sentenced
Detective Superintendent Tony Crampton, of the City of London Police said: "Maylam and Baxter both had good jobs with decent salaries. But they decided they wanted a place on millionaire's row so they cooked up an elaborate fraud that saw them divert seven figure sums from their employers' accounts," he said."They were greedy for a luxury lifestyle, frittering the money away on frivolous spending which was only made possible by Behagg's complicity."
The top 10 scams of 2011
- 1. Land banking<p> Land banking involves plots of land offered for sale, often online, with the promise of sizable returns when planning permission is approved for housing or other development. Yet often the land is located in areas protected from development by planning law.</p> <p> The companies involved soon disappear with investors' money and as the firms are not protected by the Financial Services Authority, their funds are not covered by the Financial Services Compensation Scheme</p>
- 2. Money mule<p> Fraudsters recruit unknowing accomplices through email under the guise of offering employment, seeking a personal favour, or through internet shopping sites. The recruits are persuaded into receiving what are essentially fraudulent payments and then passing funds on.</p> <p> The 'mules' are frequently offered a small financial incentive to encourage involvement and face difficulties in proving their innocence when the fraud is discovered.</p>
- 3. Carbon credit fraud<p> The scams claim to offer people the chance to profit from carbon credits. Under regulations that permit businesses to emit a tonne of CO2 – the companies claim to offer investment in green projects like a forestry scheme or a solar panel project, which generates carbon credits that are then sold on to heavy industry.</p> <p> A flashy brochure or website tells of a reliable 'government-backed' scheme which provides reliable returns for investors. Such a scheme doesn't exist however – a reality investors only discovered when they have parted with their cash and the company is untraceable. As with land banking, fraudulent companies are not covered by the FSA so victims have no course for recompense</p>
- 4. HMRC phishing scam<p> Receiving an email from the taxman saying you are owed a payment may seem like a nice surprise, but it is actually from fraudsters trying to relieve you of your cash instead.</p> <p> The emails provide a "click-through link" to a cloned replica of the HMRC website. The recipient is then asked to provide their credit or debit card details - all the information the criminals need to clear your account, and sell on your personal details.</p>
- 5. Disappearing loan scam<p> This scam targets vulnerable people who are in financial difficulty and unable to access credit through regular channels like overdrafts and credit cards.</p> <p> The fraudsters advertise loans and those that sign up are asked to pay an upfront 'arrangement' fee of around £60-£70 fee before the loan is approved. Borrowers pay the fee only for the 'loan providers' to disappear without a trace.</p>
- 6. Crash for cash scams<p> Insurer Direct Line reported a hike in the number of 'crash for cash' scams last year – where fraudsters fake accidents by making unnecessary emergency stops at busy roundabouts or slip roads, forcing motorists to crash into them.</p> <p> They then make bogus claims to the innocent motorist's insurer, often including fictitious injuries and passengers.</p>
- 7. Driving school scams<p> Learner drivers have been taken for ride by being unknowingly taught by trainee instructors. An investigation by the AA found up to 27,000 extra driving tests have been failed in the last year because one in 10 learner drivers are unwittingly taught by an instructor they do not know is learning on the job.</p>
- 8. One man mail scam<p> July saw the arrest of a Leicester postman who stole £46,686 worth of mail over two-and-a-half years. Yogeshbhai Patel, 38, was jailed for two years for stealing mail including 2,000 DVDs and 2,250 games along with CDs and other electrical equipment. He intercepting the valuable packages and spent the money on living a luxury lifestyle including helicopter rides and a trip to Las Vegas.</p>
- 9. Smart meter scam<p> The Trading Standards Institute reported over 200 cases where elderly homeowners have been targeted by telephone cold callers, purporting to be from their energy supplier and offering energy saving devices which could cut their bills by 40%.</p> <p> The TSI tested the devices in homes where owners had fallen for the scam, only to find they both failed to satisfy electrical safety standards or deliver any tangible energy savings.</p>
- 10. Thermal camera fraud<p> Thermal cameras that track ATM pin numbers are the latest weapon in their arsenal and US scientists have warned it is the next threat for this form of crime. Researchers at the University of California at San Diego found that up to 45 seconds after a person types their pin code into an ATM machine or door entry pad the numbers and even the sequence are still readable by thermal cameras.</p>
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