Potato buyer jailed for £9m Sainsbury's potato scam
Friday 22 June 2012
A Sainsbury's potato buyer who funded a millionaire's lifestyle by
taking part in a scam that stole money from the supermarket giant was
jailed for four years today.
John Maylam, who was head buyer, led a life of "outrageous extravagance" by taking bribes from supplier Greenvale in return for lucrative contracts with the chain.
The money laundering scheme he concocted with Greenvale accounts manager David Baxter saw Sainsbury's overcharged by nearly £9 million.
The surplus was then put in a bank account for "frivolous spending" including on a luxury trip to Monaco, lengthy stays at top hotels including Claridge's, a £94,000 Aston Martin and restaurants that could feature on a "gourmand's tour of London".
Maylam incurred expenses of £20,000 a month and was handed brown envelopes stuffed with cash, with one lump sum given to him via a Luxembourg account to the tune of £1.5 million.
Payments were authorised by Greenvale's then finance director Andrew Behagg.
The three men, all of previous good character and long-standing employees of their firms, are now starting jail terms after being sentenced at Croydon Crown Court in south London.
Judge Nicholas Ainley said it was "very nearly as serious a case of corruption as I can imagine" that involved Sainsbury's "being bribed with its own money".
Maylam was able to collude with Baxter, his key contact at Greenvale, to artificially inflate the price of potatoes from the firm to a higher rate than the one previously agreed with Sainsbury's.
The normal variation in the price of potatoes, depending on the volume and quality of crops, allowed this to go unnoticed, with the surplus money put into what the defendants called "the fund".
It was this pot that paid for Maylam's bribes, with no one else from Sainsbury's knowing of its existence, the court heard.
A four-year police investigation revealed that £4.9 million was paid to Maylam out of the fund. The total amount the supermarket says it was overcharged by was £8.7 million.
Judge Ainley said as he sentenced the men: "There will be many who find the details of frankly outrageous extravagance this case offers fascinating. But 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.
"Corruption because Greenvale wanted to keep the Sainsbury's contract, a contract for 45% of Sainsbury's potato contract worth about £40 million, and they offered Maylam, the Sainsbury's buyer, all the lavish entertainment he wanted, over £1 million of it."
The bribery "may not have been necessary at all", the judge said.
"There may not have been a danger of losing the business."
Maylam and married father-of-two Baxter were "drinking partners", the court heard, and spent large amounts of money on fine wine and food.
Nicholas Walker, representing Maylam, said his client admitted the entertainment lavished on him was "excessive, almost to the point of vulgarity".
Maylam's drinking "contributed to his escapism and allowed him to avoid looking at the reflection in the mirror and conceding the reality of his offences", according to Mr Walker.
"Some of the restaurants that formed part of that reads like a gourmand's tour of London."
Baxter drank to such an extent that he was taken ill and diagnosed with cirrhosis of the liver, his counsel Robert Benzynie said, which acted as "a wake-up call". Baxter counted the entertainment "as work".
Judge Ainley said: "It was Sainsbury's corrupt employee Maylam who was allowing himself to be bribed with what he knew was his employer's money. All three of you knew it. All three of you approved it. Two of you benefited from it.
"It was a Sainsbury's reserve account held by Greenvale and you were using it, in effect, as your private account."
The scam amounted to "a till being rifled".
Detective Superintendent Tony Crampton, of City of London Police, said: "Maylam and Baxter both had good jobs with decent salaries. But they decided they wanted a place on millionaires' row, so they cooked up an elaborate fraud that saw them divert seven-figure sums from their employers' accounts.
"They were greedy for a luxury lifestyle, frittering the money away on frivolous spending which was only made possible by Behagg's complicity."
The men thought the fraud was "so complex" that it would not be discovered.
Maylam, 45, of Bearsted, Maidstone, Kent, admitted corruption and acquiring criminal property at a court hearing last year.
Baxter, 50, of Hinstock, near Market Drayton in Shropshire, was jailed for 30 months after admitting the same charges.
Behagg, a 60-year-old grandfather from Chatteris in Cambridgeshire, was found guilty of corruption by authorising payments to Maylam following a trial. He was jailed for three years.
Maylam closed his eyes as his sentence was passed, while Baxter nodded his head slightly.
Behagg did not react. As he left the dock, he mouthed the words "I love you" to his wife who watched proceedings from the public gallery, clutching a friend's hand. Behagg, whose wife is seriously ill, was described in court as a pillar of the community, with 220 letters of support written to the judge from his friends and neighbours.
All three were employed by their firms for many years: Maylam for about 20 years by Sainsbury's and Baxter for 30 years by Greenvale.
Behagg, a grandfather now past retirement age, worked "all his life for Greenvale", his counsel William Clegg QC said.
They have all now been sacked.
A Sainsbury's spokeswoman said: "This was an unacceptable and calculated crime against Sainsbury's and we are pleased that justice has been done. Today's sentencing sends a very clear message to anyone that behaves in this way that there are consequences to their actions."
In a statement, the owner of Greenvale AP, Produce Investments, said: "Produce Investments has no tolerance of bribery, corruption or any other wrongdoing in business.
"The sentencing of Andrew Behagg and David Baxter, formerly of Greenvale, and of former Sainsbury's buyer John Maylam, should serve to draw a line under this distressing saga."
Sainsbury's and Greenvale have both applied for compensation. A confiscation hearing takes place next year.
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