Gang guilty of £1m fraud

28/06/2013

A gang was yesterday found guilty at Birmingham Crown Court of stealing over a £1million from a number of public sector agencies and charities.

 Kulbinder Rai, aged 34, Warwick Kirkwood, 29, and Sharon Downes, 35, were all found guilty of conspiracy to defraud.

At an earlier hearing, three other defendants, Dean Haer, 28, Momonu Adjibade, 32, and Lee McColl, 27, had pleaded guilty to the same offence. 

The fraud, which was committed between January 2005 and April 2012, involved the defendants setting up bogus companies with names similar to official publication companies who advertised public sector jobs.  

The gang members would then contact public sector agencies and charities, who had placed job adverts in the genuine publications, claiming that they had not paid for their advertisement. Invoices would be then raised with strict time limits for the payments to be made with the threat of legal actions if the amount was not paid.

Over a seven year period, this illegal activity netted the gang in excess of £1million. 

Following an investigation by the Insolvency Service, the police were informed of the fraudulent activities and the defendants were later arrested and charged with conspiracy to defraud. 

Victoria Jones, Special Casework Lawyer from the West Midlands Crown Prosecution Service's Complex Casework Unit, said:

"This was an extremely sophisticated crime which involved a substantial fraud committed against public sector agencies and charities.

"The gang would set up bogus companies and then scour official publications for adverts which had been placed by the public sector for jobs. They would call the designated contact on the advert, claim to be from the official publication and state they had not paid for the advertisement. Booking forms and invoices would be faxed to reinforce the fraud.

"Often the harried and busy staff would panic and the fake invoice would be paid into the fraudulent companies' bank account. This resulted in a large number of NHS Trusts, hospices, charities, educational establishments and Local Authorities paying for the adverts twice. Many of the organisations did not realise they had been the victim of a fraud.

"In order to cover their illegal activities, the gang began to recruit a number of vulnerable males to act as 'Directors'. Some of these males were homeless, or in debt and readily agreed to be a 'Director' on paper, but had no involvement in the running of the fraudulent companies and no knowledge of their activities. 

"Following the arrest of a number of these 'Directors' by the City of London Police, the gang members themselves were arrested.

"The success of this operation has been down to the assistance of various agencies and I would like to thank NHS Protect, the various City Councils, Trading Standards, and particularly the Insolvency Service. The police officer in charge of the investigation, Detective Sargent Hema Chauhan from Warwickshire Police, has worked tirelessly on this case and worked closely with ourselves over the past three years to ensure this gang was brought to justice.

"The CPS will now take steps to recover the amounts stolen."

Welcoming the verdict, Company Investigations Supervisor at the Insolvency Service, Chris Mayhew said:

"This was a well practiced fraud to deceive public bodies and others. In the past three and a half years The Insolvency Service, in collaboration with other Government agencies, has shut down 27 of the recruitment companies concerned. The methods employed by these companies included ruthlessly exploiting vulnerable people into participating in the dishonest scheme.

"Those responsible deceived the public sector and charitable organisations out of £1m and were prepared to say or do anything to fend off enquiries from the authorities. The outcome sends a clear message that The Service is determined to ensure fraudulent business will not get away with it."