‘High stakes’ conspiracy that defrauded councils and hospitals smashed by police

An audacious “high-stakes” criminal conspiracy which defrauded NHS hospitals, councils and the Guernsey government out of £12.6 million, and funnelled cash overseas, has been smashed by police.

An organised crime network targeted 22 mostly public bodies in a divert fraud, with the dirty money transferred to international accounts and laundered into legitimate businesses.

The bold scheme had the potential to have siphoned off £20 million into accounts the criminals controlled, mainly at the taxpayers’ expense.

Sentencing 10 of those involved at Leicester Crown Court, Judge Philip Head said: “This was a sophisticated and widespread fraud in its conception and execution.”

Jailing the conspirators for between 10 years and 22 weeks, he added: “These bodies were selected because it was hoped their accounting processes would be vulnerable.”

He added: “The loss falls necessarily on those who are not able to pay it, ultimately the members of the public whose taxes fund these bodies.”

The case can only now be reported after reporting restrictions were lifted.

Cash was extracted by fooling organisations with forged letters pretending to be from legitimate building firms, already carrying out work for the public bodies.

The fraudsters took full advantage of the fact that public sector contracts were freely available to see, under financial transparency rules.

The co-conspirators would write, either by email or fax, claiming to have changed their companies’ banking details, and supply instead an account controlled by the criminals.

Several of those convicted for their part provided the accounts used, or administered how the money was moved while others took a leading role in targeting organisations.

However, what the judge called the “prime-mover”, identified in court as Nigerian national Bayo Awonorin, was still at large, having failed to answer to police bail.

After a Lincoln-based NHS hospital first raised the alarm, diligent investigation work by detectives from Lincolnshire Police led them to uncover a “seamless process” of a fraud and money laundering operation crossing international borders, involving not just the UK, but Europe, Africa and the Middle East.

Among the conspirators was a former nightclub toiletries’ seller, company directors and a newsagent.

Some of the letters they sent, complete with company logos, false signatories and reference numbers, had actually been faxed from an internet cafe in Dalston, east London.

Ill-gotten gains were then laundered through “many layers” of accounts, with the cash funnelled to legitimate businesses, including a children’s soft play area development in Scotland and a cafe in Sutton Coldfield, West Midlands.

The conspiracy’s tendrils stretched to company accounts in Poland, Dubai and Nigeria, with targets including an airport development run by the States of Guernsey, the Royal College of Arts (RCA), and NHS trusts in Lincolnshire, London, and the North.

The conspiracy’s “trusted lieutenant” Stephen Tyndale, 47, of Albany Road, Southwark, London, was jailed for 10 years each, for conspiracy to defraud and conspiracy to launder money, to run concurrently.

Asif Habib, 53, of Al Barsha, Dubai, Imitiaz Khoda, 44, of Dallas Road, Lancaster, Abdul Naeem, 36, of Lineholt Close, Redditch, Worcestershire, and his brother Mohammed Nadeem, 33, also of Redditch, were convicted of conspiring to launder the dirty cash.

Habib was jailed for 40 months, Khoda for 54 months, and the brothers for 67 months each.

Father-of-seven Oghogho Ehanire, 42, of Brackenbury Road, Preston, Lancashire, was jailed for 12 months suspended for two years for laundering.

Also given suspended jail terms for laundering were Yagnesh Patel, 46, of Rookery Road, Staines, Surrey; 15 months, Zaheed Muhammed, 48, of Tinto Road, Glasgow; 21 months, and Abdul Ghaffar, 68, of Lineholt Close, Redditch; 22 weeks.

Tariq Khan, 35, of Meadway, Ilford, Essex, was jailed for eight months and ordered to repay £20,000 to the Lincolnshire NHS trust after admitting perverting the course of justice by supplying false documents to police.

An 11th person, Monica Thomson, 40, of Ivy Way, Airdrie, North Lanarkshire, will be sentenced for her part in the conspiracy next month.

What the judge called a “shadowy” network of individuals, not all of whom have been identified, controlled where the money was funnelled.

In one case, a £1.28 million payment to build a mental health unit at Lincoln’s St George’s Hospital site was diverted, after NHS trust staff failed to check the new bank details supplied.

It was only when an employee of the building firm Costain saw the bogus letter, with its logo out of place, a fake reference number and dodgy signatures, that the alarm was raised.

Lincolnshire Partnership NHS Foundation Trust then called in the police at the end of 2011, triggering a lengthy investigation which needed the co-operation of law enforcement in Dubai and Poland.

The RCA was targeted for £1.26 million in September 2011, but the mistake was spotted and the money returned.

Elsewhere, the Guernsey government, and taxpayers, lost £2.6 million to the fraud.

Two other men, John Woodhatch, then 56, and Adrian Taylor, 44, have already been jailed for a total of 11 years at Southwark Crown Court in September 2015, for money laundering and acquiring criminal property.

But sentencing at Leicester Crown Court, Judge Head said: “Over 18 months, 21 bodies were contacted.

“Some made checks and ignored the fraudulent communications.

“Some did not, and made such payments.”

He also concluded a 22nd institution, Plymouth University, was targeted, although no money was taken.

After sentencing, on June 23, Detective Sergeant Mike Billam, who led Lincolnshire Police’s investigation, said: “I am pleased to say that with the assistance of law enforcement in Dubai, Poland and other countries, this investigation has got to the heart of this conspiracy and has disabled what was clearly an international organised crime group.”

He added: “The sentences handed out to 10 defendants reflect the fact that these individuals, motivated only by their own personal greed, have sought to take the taxpayers’ money.”

Mr Billam also praised other UK forces, the Crown Prosecution Service, NHS Protect, and the work of the NHS computer forensics department, in helping secure the convictions.

List of bodies targeted in sophisticated ‘high stakes’ fraud

Key members of an audacious conspiracy to defraud NHS hospitals, councils and the Guernsey government out of a total of £12.6 million have been jailed for up to 10 years.

Leicester Crown Court heard how 21 mostly public bodies were targeted by the sophisticated divert fraud, which spanned not only the UK but took criminal investigators to bank accounts and companies based in Poland, Dubai, and Nigeria.

In each case, a bogus email, fax or letter was sent pretending to be from a legitimate firm already carrying out contract works for the organisation targeted. The letter would supply new bank details for existing contract cash to be paid into, however these accounts were in fact controlled by the criminals. The cash was diverted and then laundered on through overseas bank accounts.

The list of targets:

• States of Guernsey Government was defrauded of the largest single amount, £2.6 million, and the cash funnelled into seven separate accounts.
• Lincolnshire Partnership NHS Foundation Trust lost £1.28 million, which was laundered through eight separate bank accounts.
• The Royal College of Art paid out £1.26 million but all the money was recovered.
• Royal Free Hampstead Hospital paid out £1.43 million to the fraudsters, but the cash was returned.
• St Paul’s School, in Barnes, Middlesex, was cheated out of £937,015, but all money was recovered.
• Kingston University transferred £1.75 million, however the money was returned.
• North Essex Partnership NHS Foundation Trust was defrauded of £896,700, with £536,966 was recovered.
• Goodmans Logistics, in Solihull, West Midlands, was targeted and paid £1.052 million, which ended up being laundered by crooks through 15 separate accounts. £255,000 was recovered.
• Dundee City Council was asked for £396,977, but the fraud was identified shortly afterwards and the cash recovered.
• Falkirk Council was targeted but the request was ignored.
• Middlesbrough Council paid out £236,477, although £197,718 was recovered.
• Derby University paid out £314,438, with £173,818 of the money later recovered by the bank.
• Norfolk and Suffolk NHS Foundation Trust ignored the fraudulent request.
• Galliford Try PLC were defrauded of £187,703, of which £12,569 was recovered.
• Freebridge Community Housing (Norfolk), received a fraudulent request by fax, but ignored it.
• Sheffield Teaching Hospitals NHS Foundation Trust were targeted but did not respond.
• Tees, Esk and Wear Valley NHS Foundation Trust, paid £261,260. All the money was lost.
• Greenfield Housing Association ignored the phoney bank account details and paid nothing.
• Clackmannanshire Council in Scotland ignored the dodgy letter it received from fraudsters.
• Derwent Valley Holdings PLC was targeted but ignored the bogus letter it received.
• Northumberland, Tyne and Wear NHS Foundation Trust also ignored the bogus email they received.

In court, the judge also found, on the evidence, that Plymouth University had also been targeted but never responded to the fake communication.

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