Four people have been found guilty at Reading Crown Court in a case of bribery for service contracts between a Slough-based machinery maintenance firm and Mars, the confectionary company. All four have been given custodial sentences.
The verdicts were delivered on 8 December but publication at that time was prohibited by order of the judge. That prohibition has now been rescinded.
The four convicted defendants are Barry Alexander Simpson and Roger Harper (both former co-owners of Ironfirm Ltd, trading as Excel Engineering), Anthony "Tony" Frederick Welcher (a former employee of Mars UK Ltd) and his wife Georgina Welcher.
Background
Barry Simpson and Roger Harper owned and ran Excel Engineering from the early 1980s. The firm is located on the Slough Trading Estate, opposite one of the Mars factories, and specialises in providing plant maintenance and emergency repair services to manufacturing companies in the area. Mars provided Excel Engineering with the bulk of its business. By 2001 its turnover was about £3 million and it employed around fifty people.
Tony Welcher was a middle manager at Mars responsible for maintenance of production lines. He oversaw the provision of plant services by subcontractors, approved the award of contracts, monitored quality of service and authorised payments. It was important to Mars that production interruption was kept to a minimum. Repairs were sometimes needed urgently, with no time for competitive tendering. The company relied on the security of having long-term relationships with its suppliers and allowed its staff a high degree of autonomy in contract placement. Consequently Welcher was able to deal with Excel Engineering over a number of years without imposition of supervision or scrutiny. He abused the trust placed in him.
Tony and Georgina Welcher purported to run a design consultancy business called GW Designs and claimed to have supplied computer aided design drawings to Excel Engineering and others. Georgina Welcher was also on the payroll of Excel Engineering as private secretary and chauffeur to Barry Simpson and Roger Harper. Tony Welcher's 88-year old mother was allegedly also employed by Excel Engineering - as a cleaner. However, none of the other members of staff at the firm were aware that both women were employees of the company and none ever saw either woman working at the premises.
In 2001 Excel Engineering was sold to new owners but thereafter the volume of business and income did not match past levels. It became apparent to the new owners that the company's success had been largely dependant on contracts from Mars in return for improper inducements. These bribes were usually in the form of regular cash payments, or in the form of gifts, to Tony Welcher and to others, including Georgina Welcher. Examples include electrical items, power tools, car hire, garden furniture and equipment, domestic boilers, cameras and car repairs/metalwork. The Welchers' home was fitted with a conservatory which was paid for in part by Excel Engineering. The cost of the conservatory was ultimately recouped by Excel Engineering by over-charging Mars.
Proceedings
Suspicions were reported by the new owners of Excel Engineering to Thames Valley Police and then referred to the SFO in summer 2002. Officers from the Thames Valley Police Economic Crime Unit worked in conjunction with the SFO investigation team. The investigation uncovered not only corrupt cash payments but also a system whereby invoices were presented to Mars at various times throughout the 1990s for work not done, or at inflated prices. Invoices from GW Designs were one of the methods used to extract money from Mars. The directors of Excel Engineering also used invoices from fictitious "ghost" companies to extract payment to cover the system of cash bribes. These were recorded separately from genuine works orders and allocated a "70,000" series number to distinguished them from invoices from real sub-contractors. The amount estimated to have been paid out by way of bribes to the Welchers and others is around £1 million, although the amount fraudulently extracted from Mars is thought to be much higher.
Evidential searches were conducted on the defendants' homes in December 2002.
Despite attempts by Barry Simpson and Roger Harper to erase records from Excel Engineering's computer systems, there was clear evidence to show the systematic and deliberate conspiracy to defraud Mars. Examination of Excel Engineering's computerised accounting system revealed the existence of specific codes for each Mars employee in receipt of bribes. These records were matched to paper records including the company's auditors' papers and the false subcontractor invoices.
Mars and the current owners of Excel Engineering have co-operated throughout the investigation.
The defendants were charged in November 2004 and the trial commenced at Reading Crown Court on 27 September 2005 with Her Honour Judge Smith presiding.
The defendants were tried on two counts:
Count 1 - Conspiracy to corrupt.
From about January 1991 until about 30 June 2001 the defendants conspired together and with others that contrary to Section 1 of the Prevention of Corruption Act 1906, Barry Simpson and Roger Harper should corruptly give, and Anthony Welcher and other agents of Mars UK Ltd, and Georgina Welcher should corruptly accept or obtain gifts or consideration, namely cash and/or items of value and/or services, as inducements or rewards for showing favour to Ironfirm Ltd (trading as "Excel Engineering"), Barry Alexander Simpson and Roger Harper in relation to the business of Mars UK Ltd, namely:
- The placing of orders by Mars UK Ltd with Excel Engineering;
- The authorising of payments to Excel Engineering for work done;
- The authorising of payments to Excel Engineering for work not done;
- The authorising of overpayments to Excel Engineering
Count 2 - Conspiracy to defraud.
From about January 1991 until about 30 June 2001 they conspired together and with others to defraud Mars UK Ltd by:
- Issuing purchase orders on behalf of Mars UK Ltd to Excel Engineering for work which was not required and/or was not done and/or provided for excessive charges to Mars UK Ltd;
- Submitting invoices for such work;
- Authorising payments on account of such invoices;
- Procuring that Mars UK Ltd, through payments of inflated invoices, provided funds for such payments and other gifts
Verdicts and sentencing
The jury were sent to consider the verdicts on 5 December and on 8 December they found Barry Simpson, Roger Harper and Anthony Welcher guilty on both counts and Georgina Welcher guilty on count 1 and not guilty on count 2. On Friday 9 December the offenders were sentenced to terms of imprisonment, to run concurrently, as follows:
Count 1
Barry Simpson 4 years
Roger Harper 4 years
Tony Welcher 3 years
Georgina Welcher 15 months
Count 2
Barry Simpson 6 ½ years
Roger Harper 6 ½ years
Tony Welcher 4 ½ years
Georgina Welcher not guilty
Confiscation proceedings are underway.
Note for editors
Publication of these convictions has, for legal reasons, been prohibited until now. However the prohibition remains in relation to outstanding proceedings against another party in this case whose identity and circumstances cannot be reported until further order.
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