Belfast Telegraph

Friday 29 August 2014

Potato buyer jailed for £9m scam

Supermarket Sainsbury's fell victim to a nine million pound potato supply scam

A Sainsbury's potato buyer who funded a millionaire's lifestyle by taking part in a scam that stole money from the supermarket giant has been jailed for four years.

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, 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.

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