THREE men were jailed today for a potato scam that saw Sainsbury’s overcharged by nearly £9 million.
Andrew Behagg, a former finance director at potato supplier Greenvale, and former Greenvale director David Baxter showered Sainsbury’s potato buyer John Maylam with gifts and hospitality in return for lucrative contracts with the supermarket.
Maylam, 45, of Bearsted, Maidstone, Kent, who admitted corruption and acquiring criminal property, was jailed for four years at Croydon Crown Court, in south London.
Baxter, 50, of Hinstock, near Market Drayton in Shropshire, who also admitted corruption and acquiring criminal property, was jailed for 30 months.
Behagg, 60, from Chatteris in Cambridgeshire, who was found guilty of corruption by authorising payments to Maylam following a trial, was jailed for three years.
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 treated to a lavish lifestyle of fast cars and luxury yachts, the court heard. Hundreds of thousands of pounds was spent on him so he could take his friends and family to exclusive hotels and a VIP trip to Monaco.
In May 2007 he jetted off to the south of France and Monte Carlo with his wife, along with Baxter and a number of friends, for an all-expenses-paid holiday for his 40th birthday.
Between them, they spent nights at the five-star Hotel Byblos in St Tropez, the swanky Hotel Martinez in Cannes and The Hermitage in Monaco. Their total bill for the rooms, meals and corporate hospitality tickets for the showpiece Monaco Grand Prix came to over £350,000.
Greenvale signed off the trip as “team building”.
A four-year police investigation revealed that £4.9 million was paid to Maylam out of a fund created by the overcharging of Sainsbury’s.
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 judge added that the bribery “may not have been necessary at all” and said: “There may not have been a danger of losing the business.”
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.
Jurors at Behagg’s trial heard Maylam, a senior buyer, incurred expenses of £20,000 a month, spending the money at expensive restaurants and hotels including Claridge’s and The Dorchester.
He also received lump sum payments via an account in Luxembourg to the tune of £1.5 million.
He and married father-of-two Baxter were “drinking partners”, the court heard, and spent large amounts of money on fine wines and food.
Nicholas Walker, representing Maylam, said his client admitted the entertainment lavished on him was “excessive almost to the point of vulgarity”.
He added: “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”.
He had counted the entertainment “as work”, Mr Benzynie added. 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.
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.”
He added that the scam amounted to “a till being rifled”.
All three had been employed by their firms for many years - Maylam for about 20 years by Sainsbury’s and Baxter for 30 years.
Behagg, a grandfather now past retirement age, worked “all his life for Greenvale - almost literally man and boy”, his counsel William Clegg QC said.
Behagg, whose wife is seriously ill, did not instigate the scam and did not benefit directly but was “aware of what was happening at a very early stage” and should have reported it, the packed courtroom was told.
The judge told Behagg, who was also a shareholder at Greenvale: “You admitted in your own words that you were supposed to be the financial gatekeeper. You deliberately walked away from your post.”
Speaking to Maylam, Judge Ainley said he effectively took money from his own employer.
He added: “You abused their trust so that you could lead the life of a very rich man.
“What started off as generous requirements for expenses rapidly became an utter abuse.”
Turning to Baxter, who was provided with a credit card to draw money from “the fund”, the judge said he “took the opportunity to lead the life of a rich man at somebody else’s expense”.
He said he believed Baxter personally benefited by about £100,000 and added: “You knew perfectly well you were stealing money from Sainsbury’s to live as extravagantly as you did over that period.”
The scam took place between 2006 and 2008, coming to light after Greenvale’s parent company Produce Investments ordered an investigation. A confiscation hearing will be held early next year.