Organised Crime Group exposed by GMPPublished 02/21/2013 04:45:49 PM
An organised crime group behind a £20m scam to defraud major retailers out of goods has been exposed thanks to Greater Manchester Police.
Operation Component was launched by Greater Manchester Police's Fraud Investigation Unit in 2009 to target a criminal network suspected of fraudulently hijacking the corporate identities of fast food giant McDonalds and Greggs the bakery.
By setting up bogus email addresses but using the names of genuine employees of both firms, they were able to fraudulently obtain credit and millions of pounds worth of goods from a number of major suppliers.
They ordered goods and arranged for them to be delivered to addresses in Manchester and Cheshire, where the goods were collected but never paid for. Only a fraction of the goods fraudulently stolen have ever been recovered.
In total, 13 companies fell victim to the scam, recording losses of around £3m. As many as 80 companies were embroiled in the conspiracy but a number of them sensed something was amiss and cancelled the orders, otherwise the total losses would have been just short of £20m.
One of the firms that were scammed were Celltec Limited, and a result of recording losses of over £400,000 because of the criminal actions of this gang, went into liquidation and 40 employees were made redundant.
On 21 February 2013 the gang were sentenced at Manchester Crown Court, Crown Square.
At previous hearings, Daniel Pomeroy (born 03/11/1987), of Oldham (aka Daniel McDonagh) pleaded guilty to one count of conspiracy to defraud and James Chapman (born 08/07/1990) of Sycamore Avenue, Chadderton, pleaded guilty to two counts of conspiracy to defraud.
Daniel's uncle, Kevin George Pomeroy (born 29/11/1965) of Stamford Drive, Failsworth, pleaded guilty to two counts of conspiracy to defraud and one count of money laundering.
Kevin's wife Julie Pomeroy (born 20/08/1973), also of Stamford Drive, Failsworth, pleaded guilty to money laundering.
Kevin Pomeroy was sentenced to a total of eight and a half years in prison, Chapman to three years, Daniel Pomeroy to three and a half years which includes an 18-month sentence for a separate fraud offence and Julie Pomeroy to 12 months, suspended for two years, and ordered to undertake 150 hours unpaid work.
Kevin and Julie used the money to fund a lavish lifestyle far beyond their legitimate means of income, which included a plush home in Failsworth, a rented holiday home in Spain, purchasing jewellery and rare and expensive sports memorabilia, dental veneers, high-powered cars and extravagant amounts of money spent on christening and other events.
Detective Chief Inspector Dave Pester, Senior Investigating Officer, said: "One of the biggest problems facing the UK right now is this sort of impersonation or hijacking of corporate identities, which is costing the economy millions of pounds every year.
"This organised crime group successfully obtained £3m worth of goods, and if they had succeeded with every fraud would have pocketed just shy of £20m worth. That is a staggering amount and if you consider this sort of scam could be happening across the UK, the cost to the economy is eye-watering. Not only that but it feeds the black market which puts genuine retailers out of business as these goods find their way into peoples homes.
"This gang went to meticulous lengths to research genuine employees of blue-chip firms and present a veneer of respectability. Using extremely plausible scenarios, they fooled a number of companies who had no reason to suspect the orders were anything other than legitimate.
"Sadly, some of the companies who were scammed did not do enough research once the fradulent orders were placed and were taken in by the promise of a big pay day thinking they were dealing with such blue-chip companies. We would therefore urge any businesses who receive such orders to know your customers. In times of austerity, you cannot afford to fall victim to this sort of scam so please, do your research before you commit to anything.
"We do not know where the stolen goods were fenced onto, but they would almost certainly have been resold in large quantities. Because they were obtained for nothing, even if the goods were resold for less than their market value the gang were still making massive profits which is evidenced in the lavish lifestyle the Pomeroy's led.
"Their legitimate means of income would not even come close to the tens of thousands they forked out on cars, plasma TVs, jewellery, sports memorabilia, holidays, rented apartments in Spain and Jacuzzi's in the back garden - they really were living a life of Riley.
"But let's be clear - despite the sophistication of their scam this still boils down to theft and in the end, they were not clever enough to avoid capture, or prison.
"I do not want to disclose the exact details of what our officers did to expose this scam because it is important we do not show our hand to other potential offenders, but I want to stress this was an extremely complex inquiry that was solved due to the sheer tenacity, expertise and skill of our officers who had to unpick the various threads of this conspiracy to unravel it. Huge credit should go to everyone involved with this investigation as without their painstaking work stretching over many months I have no doubt this gang would still be out there committing these sorts of fraud today.
"I would also like to thank those businesses who worked very closely with us as the investigation unfolded and who were instrumental in helping us expose this conspiracy.
"Finally, we need to remember the human fall-out of this scam. One company went into liquidation which resulted in people losing their livelihoods. Had other smaller businesses fell victim, the cost to them would have been disastrous.
"I am therefore absolutely delighted that four years after this scam started, the culprits have been exposed and brought to justice thanks to our Fraud Investigation Team."
The OCG's scam began in 2008 and for the first two years they impersonated employees of McDonalds, sucking in a number of other unwitting organisations such as transport companies and individuals who rented out storage facilities, as well as the companies they targeted to fraudulently obtain goods.
During this two-year period, their typical modus operandi would be to call or email retailers of electronic goods such as Alba, HMV or Daewoo purporting to be from McDonalds. Assuming the names of genuine employees - including senior officials - to present the veneer of respectability they would order bulk quantities of electronic goods such as plasma TVs, games consoles, washer dryers or laptops, which they claimed would be installed in restaurants across the country.
Often they claimed the goods were needed at charity events or to reward staff for their hard work with bottles of champagne or whisky.
Pomeroy and co would also open credit accounts with these firms, often worth six figures.
The goods were delivered to storage facilities in the Manchester and Cheshire areas, but no payments were ever made. In the case of Celltec, the company had to increase its credit limit to cover the costs of purchasing computers from its own suppliers, which hastened their slide into liquidation.
Other goods fraudulently obtained in this way included thousands of bottles of whiskey and champagne and vacuum cleaners.
By 2010, the OCG switched their attention to impersonating employees from the bakery Greggs, and used the same scam to fraudulently obtain goods such as more whiskey and coffee making machines.
A complex and lengthy investigation was launched by GMP's Fraud Investigation Unit to unravel the scam, which included months of painstaking work such as analysis of email documentation, forensic and telephony work and witness statements from the defrauded companies to identify those behind the scam.
Finally, on 16 September 2010, Kevin and Daniel Pomeroy were arrested by police following an eight-minute pursuit during which Kevin Pomeroy reached speeds of more than 100mph driving on the hard shoulder of the M60 motorway in order to evade capture. Before the pair were arrested in the Oldham area, the police vehicle tracking them recorded footage of items being thrown from the Pomeroy's car, which were recovered and found to be a mobile phone SIM card, packaging and a handset. These were analysed and revealed to have been used during the numerous frauds and attempted frauds.
The homes of the Pomeroy's were searched and police seized a number of documents and a laptop. Forensic analysis discovered a raft of email documentation between the false identities assumed by the Pomeroy's and the defrauded companies along with other evidence - incontrovertibly proving the pair were behind the scam.
Julie Pomeroy was arrested later on the 16 September 2010 at her home address and Chapman a couple of months later following a positive fingerprint identification.
Daniel Pomeroy later went on the run to Ireland but was eventually recaptured by police.
Only a very small number of the stolen goods were ever recovered, so it would only be speculation as to where the goods were sold onto. However, inquiries by Greater Manchester Police established some of the money generated from the sale of the fraudulently obtained goods were put through the accounts held by Kevin's wife Julie.
Analysis of her accounts showed that just before the £2,022-a-month mortgage payments were due on their £380,000 home in Stamford Drive, Oldham, large cash deposits were made to cover the payments. £78,000 was deposited in this way. Vast swathes of money - totalling more than £35,000 - were used to pay off credit cards and purchase expensive cars, jewellery, private dental and health care, furniture and electrical items.
However, HMRC records showed neither earned enough money through legitimate means to explain this lavish lifestyle or the activity on the bank accounts.