Potato suppliers scammed Sainsbury's out of millions
Tuesday 15 May 2012
A director of a major potato firm who bribed a supermarket buyer with millions of pounds to secure huge overcharged contracts has been found guilty of corruption.
Andrew Behagg, a 60-year-old finance director at food supplier Greenvale, faces a heavy prison sentence for passing on brown envelopes full of cash to a buyer who spent the money on lavish holidays – running up a £200,000 bill at the luxury hotel Claridge’s and spending £350,000 on a 12-day trip to Monaco for the Grand Prix.
The swindle was only uncovered when a fellow employee at Greenvale became suspicious after being asked to withdraw £5,000 in £50 notes from a small bank branch.
The money was going to John Maylam, who approved orders of potatoes that saw Sainsbury’s overcharged by £8.7m. Much of the sum was paid into a Luxembourg bank account to subsidise Maylam’s expenses.
Behagg, who denied the crime and claimed he was the victim of extortion, said during his trial that Greenvale was contracted to supply almost half of Sainsbury’s British potatoes, on a £40m annual deal during the two-year scam between 2006 and 2008. The company supplies 600,000 tonnes of potatoes a year – 10 per cent of Britain’s crop.
Maylam, 44, pleaded guilty to corruption together with Greenvale's account manager David Baxter, 50. They were arrested after one of the firm’s accountants, Simon Forster, raised his concerns with an external auditor. Mr Forster told Croydon Crown Court that he had to call the local bank in Chatteris, Cambridgeshire, to arrange to pick up the cash in advance because usually they did not stock enough £50 notes.
All three men will be sentenced on 22 June. Judge Nicholas Ainley said yesterday: "For any case of this magnitude a sentence of imprisonment is almost inevitably passed, and a significant one at that."
The fraud was described as “corruption on a massive scale” by the Crown Prosecution Service.
“Today's message is clear: there is no place for corruption in British business,” said Sue Patten, head of the CPS Central Fraud Group. “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.”
Produce Investments, the owners of Greenvale, said: "We instigated this investigation and have since then introduced new procedures to make sure that such abuse can never happen again.
"Our relationship with Sainsbury's is now on a footing as before and we continue to be one of the largest suppliers of potatoes to shoppers all over the country."
A Sainsbury's spokesman said: "This was an unacceptable and calculated crime against Sainsbury's of a magnitude never experienced in our history.
"We are pleased that justice has been done with today's verdict and we would like to thank the police for their thorough investigation that led to the conviction of John Maylam and David Baxter in 2011 and Andrew Behagg today.”
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