Contractor Alandale Rail, part of the Alandale Group, was also convicted of corruption and fined £25,000 for its involvement.
Blackfriars Crown Court in London heard how British Transport Police fraud investigators uncovered a ring of corruption and bribery on a large contract to upgrade Farringdon station.
Former operations director Kevin McKee and fellow director John Zayya of Alandale Rail made corrupt payments to a senior manager working for Farringdon station joint venture contractors Costain/Laing O’Rourke so they could secure the contract to supply safety critical staff on the project.
CoLOR joint venture senior manager Innocent Obiekwe was nicknamed ‘our man in Havana’ by the two Alandale directors as he supplied confidential information during the tender process.
The information provided to Alandale Rail 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.
After Alandale Rail won the Farringdon contract by corruption, McKee, Zayya and Obiekwe then went on to defraude CoLOR by claiming for ‘ghost worker’ shifts.
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, British Transport Police fraud investigators identified payments in excess of £140,000 paid to Obiekwe along with other gifts and favours.
The proceeds of this fraud was shared amongst them, with the lion’s share going to Obiekwe.
When this practice was uncovered Zayya continued to send money to Obiekwe by using an intermediary William Waring, director at management consultancy Qualitas Infrastructure Developments.
Zayya skimmed from the operatives’ rates of pay and used Waring and his company, Qualitas, to pay the cash to Obiekwe.
Their operation came to light in 2011 after McKee told CoLOR and Transport for London of their dishonest practices, sparking an investigation.
- Kevin McKee pleaded guilty and was sentenced to 12 months’ imprisonment and disqualified from being a director for eight years.
- Innocent Obiekwe pleaded guilty to corruption and was sentenced to two years in prison and disqualified from being a director for eight years.
- John Zayya pleaded guilty to corruption and was sentenced to two years in prison and disqualified from being a director for eight years.
- William Waring pleaded guilty at trial to corruption and money laundering. He was sentenced to two years in prison and disqualified from being a director for eight years.
Jane Mitchell, Prosecutor for the CPS Specialist Fraud Division, said: “McKee, Zayya and Obiekwe cheated their way to a significant contract and their level of ongoing dishonesty was uncovered only when one of their own came forward”.
“The defendants could not hide from the overwhelming evidence put forward by the British Transport Police and CPS and all pleaded guilty, apart from the company that was found guilty unanimously by the jury.”
Detective Constable Justin Yorke from British Transport Police Commercial Fraud Squad, said: “The scale of the corruption was significant.
“While 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.
“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. ”