Counterfeiters cash is trailed across globe in fight on crime

Nottinghamshire County Council’s Mansfield-based Trading Standards unit is employing new tactics to beat a wave of complex counterfeit scams.

Chad reporter Chris Breese examines the work of a man whose unique brief is to ‘follow the money’ across the globe; the team’s financial investigator.

WHEN Stuart Peach started his four-year prison term for flooding the country with hundreds of thousands of pounds’ worth of counterfeit goods, it was only the start of his payback.

Peach, originally from Mansfield, was jailed in October 2010 for running a ‘factory’ churning out fakes at his home in Eastwood, Nottingham, producing mountains of fake ghd hair straighteners and designer UGG boots.

A pair of the dodgy straighteners even burned the scalp of a 17-year-old Leicester girl who used them.

As Peach (56) headed for prison after a long investigation by Trading Standards at Nottinghamshire County Council, one investigator was trawling patiently through thousands of records.

He was looking for evidence of how the scam sent cash to China for the components of the fakes, and ultimately, how much money it made.

Empowered by a law called the Proceeds of Crime Act, he was following the money.

Ultimately he was able to determine Peach, of Church Street in Eastwood, had benefited to the tune of £123,572 - with more than £18,000 recovered already through a confiscation order based on his assets at the time.

Nottinghamshire Trading Standards first employed a financial investigator, similar to those already widely used by the Police, Department for Work and Pensions, and other agencies, in 2007. So far his work has seen around £200,000 recovered from criminals.

His background and the type of work he does means Chad agreed not to identify him.

“The law and my job is about targeting lifestyles built from crime,” he explains.

“At the time the act was being developed in around 2000 they were estimating £18 billion a year was being laundered in the UK.

“It’s about taking away what people have gained from the crime and showing crime does not pay.”

The act is designed to strip criminals of the benefits of their activity.

Besides working out the full amount of cash which moves throughout a fraud, an accredited financial investigator can identify the value of any assets a criminal holds such as bank accounts, houses and cars.

This information can then be used to pay back the amount they are said to be have benefited from by committing their crime, even if the assets are legally held.

If the application for a ‘confiscation order’ is successful, criminals have a specified number of days, weeks or months to pay an amount they are ruled to be able to afford now, or face a prison sentence.

Peach was told initially he must pay the £18,000, found in bank accounts and pension schemes.

From tracking and analysing the money which went to China, investigators also proved he owes a further £105,000 - a debt which could hang over him for life.

“Under the order we can keep going back,” explains the investigator. “If he becomes a successful businessmen and comes across money in future he will still owe it.

“It’s notably draconian, but it was meant to be so.”

Trading Standards bosses say they started using such technical tactics when it became clear the scam game was changing.

Says Nicola Schofield, a team manager with the department: “The breadth of our work has expanded and we’re dealing with a lot more prolific offenders. We were looking at new tactics and we recognised that we would have to do a bit more in relation to penalties.

“Our priorities aren’t what they once were and the level of criminality we’re now dealing with has increased.”

Adds the investigator: “Organised crime groups have perhaps realised they are getting bigger sentences for drug trafficking, and counterfeiting could be seen as a smaller risk, but one where the money could be just as good.”

Peach, of Church Street in Eastwood, pleaded guilty at Nottingham Crown Court to 15 trademark offences and charges related to transferring money linked to the fraud.

But he was most likely a link in a chain, the investigator explains.

“Peach was there with no previous convictions; a perfect example of a subordinate in an organised crime gang. He would be provided with the cash and he would be told to send it to China.”

Peach was jailed alongside Tony Hall (41), of Sheepbridge Lane, Mansfield, who admitted sending £23,000 to China as part of the operation.

“Through intelligence we identified that money was going out through Western Union by Peach and Tony Hall,” explains the investigator.

“My job was to then get a court order to request Western Union to release records of the transactions. They revealed around 270 transactions to China, over just under three years, totalling around £423,000, going out in small amounts.”

Similar painstaking work is being used to determine whether David Butler, proprietor of the former Rax Clothing, on White Hart Street, benefited from his involvement with fakes.

He was hit with a six-month suspended sentence and ordered to complete 200 hours of community service in August 2011.

Butler (44), of Chesterfield Road, Mansfield, was prosecuted after Trading Standards officers raided the shop and searched his van in 2009.

They seized 562 suspected counterfeit items, including All Saints t-shirts, Lyle and Scott jumpers, G Star jeans and Calvin Klein underwear.

He also admitted trademark offences.

“Counterfeiting also tends to involve tobacco and alcohol,” adds the investigator.

“We’ve also recently had a massive run of bogus mobility aid companies. It’s often the elderly and vulnerable who are hit by this.

“People also need to be wary of anyone turning up on your door step offering to do work.

“Rogue traders come out of the woodwork in times of economic difficulty and can target people sitting on nest eggs. In these circumstances the elderly can be very vulnerable and not realise they are vulnerable.”

But cracking down on counterfeiters takes up the bulk of his work. But if they save money and look like the real thing, what’s the harm?

“Counterfeit goods are not only impacting on genuine traders, they also fund more serious crime; in some cases terrorism,” he says.

Claims the terror cell behind the 2004 Madrid train bombings, which killed 191 people, were partly funded by the sale of counterfeit CDs, have been widely reported.

“If people knew the money they are spending on counterfeit goods in some cases ultimately went on bullets and IEDs in Afghanistan would they still buy them?”