Monday, July 24, 2017

Corrupt Rail Firm Fraudsters Sentenced Following Painstaking BTP Investigation


A gang of corrupt rail firm employees who took bribes to secure a lucrative contract have today been sentenced following an extensive and prolonged investigation by British Transport Police fraud investigators. 

The investigation related to offences of corruption, fraud and money laundering that occurred during the upgrade to Farringdon Station in 2010.

The sentence for each defendant is: 

1. Alandale Rail Ltd (now Alandale Track and Civils Ltd) was fined £25,000.
2. Innocent Obiekwe  (42) of Edgware, was sentenced to two years in prison and disqualified from being a director for eight years.
3. John Zayya (51) of Catford, was sentenced to two years in prison and disqualified for eight years from being a director.
4. William Waring (56) of Ashford Kent, was sentenced to two years on two counts to run concurrently. The first count was money laundering the second count was corruption. Waring has also been disqualified from being a director for eight years. 
5. Kevin McKee (57) of Maidenhead was sentenced to 12 months imprisonment on five counts to run concurrent and disqualified for eight years from being a director.

BTP’s fraud squad first started investigating corruption surrounding Alandale Rail Ltd in February 2011 when a whistle blower at the organisation contacted the Mayor’s Office at City Hall. The Fraud Team at Transport for London then alerted BTP. 

A meticulous investigation uncovered a network of corruption and bribery for a large contract connected to upgrade works at Farringdon station.

At the heart of the corruption was Obiekwe, a senior manager at Costain and Laing O’Rourke (CoLOR) who was responsible for ensuring the health and safety procedures at the project in Farringdon. During 2010, Alandale Rail, through Zayya and  McKee, made corrupt payments to Obiekwe in order to secure a lucrative contract and additional work to supply safety critical staff (see notes to editors) as part of this project. Corrupt payments were later made through Waring to ensure Obiekwe continued to favour Alandale Rail Ltd. 

The information which was provided to Alandale Rail Ltd by Obiekwe ensured that they had a positive influence on the tender process and could undercut bids made by competitors. The initial value of the contract was £2.1m but eventually rose to £5.2m. 

However, the corruption and dishonesty did not stop once Alandale Rail Ltd had successfully won the tender. After Alandale Rail were appointed, Obiekwe and the other defendants were part of a scheme to defraud CoLOR by claiming for ‘ghost workers’. Claims were fraudulently made to CoLOR for false work undertaken by safety critical staff working for Alandale Rail Ltd. Payments were claimed for workers who never attended the site or carried out any work, and invoices and timesheets were falsified to disguise the bogus claims. 

Throughout the investigation, officers identified payments in excess of £140,000 paid to Obiekwe along with other gifts and favours.

Detective Constable Justin Yorke from British Transport Police Commercial Fraud Squad, said: “The corruption shown by all defendants was complex, prolonged and meticulously planned. However, they did not plan on a whistle-blower reporting their corruption to the Mayor of London’s office. 

“Obiekwe provided confidential information to Alandale Rail Ltd which ensured that they could undercut competitor bids, in order to secure this lucrative contract. He was motivated by greed and took bribes from Alandale Rail Ltd employees. The behaviour of Obiekwe and his fellow defendants was scandalous and undermines the legitimate tendering process companies undertake every day. I am pleased with today’s sentences and I hope this sends a very clear message to any groups who may be considering similar actions. 

“The scale of the corruption was significant. Whilst we may never know the full extent of money fraudulently claimed and laundered, I am pleased that we have brought a criminal gang to justice.”

Notes to Editors 

The ‘Safety Critical Staff’ are specially trained and responsible for the safety of operatives working on the railway infrastructure including stations and tracks. They monitor the movement of staff entering or working on the station, check relevant permits, carry out safety briefings and are responsible for planning/securing stretches of track, known as possessions, to allow work to be carried out in a safe manner. There are different roles involved and operatives are trained to various levels depending on the environment they needed to work in. Safety Critical Staff are tightly regulated. 


Charges 

Kevin McKee pleaded guilty at Blackfriars Crown Court on September 16, 2016 to the following charges:

1. Corruption, contrary to s1 Prevention of Corruption Act 1906
2. Conspiracy to defraud, contrary to Common Law
3. Money laundering contrary to s328 Proceeds of Crime Act 2002
4. Conspiracy to defraud contrary to Common Law
5. Money laundering contrary to s328 Proceeds of Crime Act 2002.

Innocent Obiekwe pleaded guilty at Blackfriars Crown Court on May 22, 2017 to a charge of corruption contrary to s1 Prevention of Corruption Act 1906.

John Zayya pleaded guilty at Blackfriars Crown Court on May 22, 2017 to a charge of corruption contrary to s1 Prevention of Corruption Act 1906. 

William Waring pleaded guilty at Blackfriars Crown Court on June 21, 2017 to a charge of corruption contrary to s1 Prevention of Corruption Act 1906 and money laundering contrary to section 328 of the Proceeds of Crime Act 2002.

Alandale Rail Limited (Company No 07019850) was found guilty by jury of corruption contrary to s1 Prevention of Corruption Act at Blackfriars Crown Court.  

Perry Morgan (54) who was charged with corruption was unanimously acquitted during trial at Blackfriars Crown Court in June 2017. 

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