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27 months for organic food fraud
| Published: 22nd September 2009 17:05 |
27-MONTH CUSTODIAL SENTENCE FOR ORGANIC FOOD FRAUD
Onefood prosecuted for Organic food Fraud
The people behind a business responsible for a £500,000 organic food scam have been successfully prosecuted by Northamptonshire County Council trading standards today (Tuesday 22nd September).
The five-year scam saw various products that were falsely described as organic being supplied by One Food Limited to consumers and businesses across the UK.
At Northampton Crown Court today (22nd September), the following sentences were passed in relation to the defendants:
* Neil Andrew Stansfield (dob 03.02.1958) of Newnham, near Daventry, Northamptonshire (the Director of One Food Limited from 08.10.2002) received a 27-month custodial sentence and six-year directorship ban.
* Katie Louise Stansfield (dob 15.06.1965) of Newnham, near Daventry, Northamptonshire (the Company Secretary of One Food Limited) from 07.06.2004 received a three-year directorship ban, a 50-week sentence suspended for two years and 150 hours of community work.
* Russell Hudson (dob 30.11.1968) of Daventry, Northamptonshire (the Operations Manager of One Food Limited from around June/July 2004) received 40 weeks sentence suspended for two years and 150 hours of community work.
(All three defendants had pleaded guilty at an earlier hearing to knowingly being party to the carrying on of the business One Food Limited for a fraudulent purpose, namely purporting to sell organic products that in fact contained non organic ingredients - contrary to Section 993(1) of the Companies Act 2006.)
Councillor Andre Gonzalez de Savage, county council cabinet member for customers and communities said: "It is deeply ironic that the initials of this company - ONE - stood for organic, natural and ethical, when clearly the foods being supplied were anything but.
"The people behind ONE Food Limited have been responsible for ripping off both consumers and businesses alike and I am very pleased that trading standards have pursued this lengthy and often complicated investigation to achieve today's result.
"People make a deliberate decision to choose organic food and have a right to know where their food has come from and what it's made of. The county council and trading standards are 100% committed to protecting consumers and businesses in Northamptonshire and will take action wherever possible to ensure that rogue trading of this type does not continue."
Background
· The scam first came to light in autumn 2007, when trading standards received information that One Food Limited (OFL) in Daventry had been receiving regular deliveries of what were suspected to be non-organic ingredients.
· Trading standards followed this up by purchasing items from OFL via the 'Swaddles Organic' website. The website stated:
Welcome to Swaddles Organic! An extensive range of Organic, Natural and Ethical meat, produce and grocery items. Swaddles food is without compromise.
· The business only sold organic food apart from game and sea fresh fish, both of which are not permitted to be described as organic. The business also ran a home delivery business called 'Swaddles Organic' (which they had acquired in 2006).
· The test purchases included organic salmon which, following scientific testing, was shown to contain synthetic astaxanthin - an additive that is used in feed for farmed salmon to achieve a pink flesh colour and which should not be found in true organic salmon.
· In December 2007 officers from trading standards and Northamptonshire Police visited the premises and seized OFL's computers and large amounts of paperwork including numerous invoices which showed purchases of non-organic ingredients.
· During the investigation carried out by trading standards, former employees of OFL stated that they were aware that the company directors were making regular purchases of non-organic ingredients from Tesco and Waitrose stores in Daventry.
· They also stated that they were asked to remove non-organic ingredients, including Atora suet, from their original packaging and re-bag it in clear bags for use in products being made by OFL. This was done to prevent the original non-organic packaging being in the premises if an organic certification body or trading standards visited.
· The investigation also found that non-organic chicken was logged against a code which would be recognised by OFL's computer system as game. Game can never be categorised as organic so by doing this, it would make it highly unlikely that any ingredient classified as game would be more closely scrutinised by organic assessors.
· Similarly, up to 50% of supplies were classified as non-stock items so that they were able to bypass the computer system without any record of the stock being moved in or out, effectively eliminating the paper trail in case of any inspection.
· Following examination of the company's financial records by a forensic accountant, it has been calculated that in the final financial year of trading (to September 2007) at least 41% of the ingredients purchased by OFL to manufacture its so-called organic products was non-organic.
· Examination of the company's computers found that 28 fictitious invoices had been created to show a far higher amount of organic chicken being purchased than was actually the case.
· Over the period of offending, approximately 28% of the ingredients purchased by the business were not organic. This equates to the business selling over £500,000 of product mis-described as organic, when the average profit margin is added.
· The company went into liquidation on 11th March 2008
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