Recently, Mr Andrew Behagg, a finance director with Greenvale (a
company that supplied potatoes to Sainsbury's) was found guilty
of corruption at Croydon Crown Court. Greenvale supplied
approximately 45% of Sainsbury's potatoes in 2008, at a cost in
the region of £40 million per year. Individuals at the
company bribed Sainsbury's potato purchaser Mr John Maylam with
lump sum payments, expensive trips and hotel stays.
Sue Patten, Head of the Crown Prosecution Service
("CPS") Central Fraud Group said:
"Potato buyer John Maylam was showered with excessive gifts
and hospitality including stays at Claridges, costing a total of
£200,000 and a luxury 12 day excursion to the Monaco Grand
Prix in 2007, at a cost to Greenvale of around £350,000.
Maylam also received lump sum payments, via an account in
Luxembourg, to the tune of £1.5 million, supposedly for the
storage of potatoes in Spain and other bogus activities."
As a result of the bribery and corruption, Mr Behagg and
accounts manager Mr David Baxter (another Greenvale employee), were
able to collude with Mr Maylam in overcharging Sainsbury's an
estimated £8.7 million. Mr Maylam and Mr Baxter pled guilty
to corruption and money laundering last year.
Croydon Crown Court heard evidence that the scheme was
discovered when another Greenvale employee grew suspicious, after
being asked to withdraw £5,000 bundles of £50 notes
from a small local bank.
Jurors heard evidence from an accountant that payments were
being entered into their financial systems as
"entertaining" expenses and then written off as "raw
materials" or storage costs for potatoes at fictitious firms
in Spain and the UK. When the accountant raised the issues of
payments with Mr Behagg he was told they were "rebates"
and part of a "scheme". In court Mr Behagg said that he
thought the payments were nothing more than
"over-the-top" expenses.
All three men involved in the corruption are to be sentenced in
June this year. Judge Nicholas Ainley yesterday warned Mr Behagg
that for "a case of this magnitude a sentence of imprisonment
is almost inevitably passed and a significant one at
that."
The CPS has sent out a strong message, re-affirming their fight
against bribery and corruption saying:
"Today's message is clear: there is no place for
corruption in British business. It attacks fair competitive
practices and undermines our international reputation. This case
demonstrates a clear distinction between reasonable business
hospitality and that which is criminally corrupt."
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
Specific Questions relating to this article should be addressed directly to the author.
The right of a person to discuss certain matters with their lawyer, no matter how nefarious, without fear of their confidence being broken is one that has been recognised since the 16th Century.
The English criminal trial process is an adversarial one. A proper examination of the evidence is achieved by both the prosecution and the defence being represented by equally able advocates who can present their client's case and test that of their opponent.
The Bribery Act has made the news again following the conviction of a would be taxi driver. Earlier this week, at Minshull Street Crown Court in Manchester, Mr Mawia Mushtaq became the second person convicted of an offence under the Bribery Act by attempting to bribe a Licensing Officer.
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