Three jailed over potato cash scam

The three men behind a bungs for contracts scam that cost Sainsbury’s supermarket £8.7m, have been jailed at Croydon Crown Court.

Two directors at potato supplier Greenvale paid Sainsbury’s buyer John Maylam millions of pounds and showered him with gifts in return for lucrative contracts between 2006 and 2008.

Mr Maylam, 45, Bearsted, Maidstone, Kent, admitted corruption and acquiring criminal property and was jailed for four years at the court on Friday 22 June.

Former Greenvale director David Baxter, 50, of Hinstock, near Market Drayton, Shropshire, pleaded guilty to corruption and acquiring criminal property and received a 30-month jail sentence. And Andrew Behagg, 60, from Chatteris, Cambridgeshire, who had been Greenvale’s finance director, was convicted of corruption by authorising payments to Mr Maylam and was given a three-year sentence.

During the trials the court was told Greenvale had a two-year contract to supply 45% of Sainsbury’s potatoes, worth £40m. But the supermarket was overcharged by millions of pounds.

One technique used by the group was to add on £1 to a crate of potatoes. They also supplied smaller packs for the same price as a crate and there were illogical prices for new packs, the trial heard.

The extra money that Sainsbury’s paid went into an account, then some of it was paid to their own employee Mr Maylam.

He received gifts that included a £200,000 bill at London’s Claridge’s Hotel and £350,000 for a 12-day trip to the Monaco Grand Prix.

The money was delivered in plain envelopes, totalling hundreds of thousands of pounds.

The crime was uncovered when a Greenvale employee was asked to withdraw £5,000 bundles of £50 notes from a small local bank.

Greenvale financial accountant Simon Forster grew suspicious and found payments were being entered into their financial system as “entertaining” expenses and then written off as “raw materials” or storage costs for potatoes at fictitious firms in Spain and the UK.

Mr Forster was told by Mr Behagg that the payments were “rebates” and part of a “scheme”.

But Greenvale called in the police and the ensuing investigation found that a total of £4.9m was paid to Mr Maylam using cash from the scam.

“Our investigations showed that £3.2 million – rather than the figure mentioned in court – had been disbursed improperly and all such arrangements were stopped immediately. We instigated this investigation and have since then introduced new procedures to make sure that such abuse can never happen again.”
Produce Investments

The total amount the supermarket says it was overcharged by was £8.7m.

Sentencing, Judge Ainley told the men: “What must be remembered is that this is a case of bribery and corruption. But not just that – this is a case of corruption involving theft on a huge scale.

Produce Investments, the owners of Greenvale, said: “Our investigations showed that £3.2 million – rather than the figure mentioned in court – had been disbursed improperly and all such arrangements were stopped immediately.

“We instigated this investigation and have since then introduced new procedures to make sure that such abuse can never happen again.

“We acquired the company in early 2006. In December 2007 it became clear to us that there might be financial discrepancies involving the company’s commercial relationship with Sainsbury’s. After a thorough investigation carried out on our behalf by accountants and legal advisers, we reported what was found to Sainsbury’s in March 2008 with a view to jointly alerting the police.

“Our relationship with Sainsbury’s is now on a footing as before and we continue to be one of the largest supplier of potatoes to shoppers all over the country.

“A new management structure has been in place since we discovered the improper payments.”