Thursday, 6 April 2017

Mail Order Entrepreneur's £31,000 Postage Fraud

An online trader, who exploited a Royal Mail loophole to enjoy £31,000 in free postage to his mail order customers, received a suspended prison sentence yesterday.

James Wakefield, 33, is the boss of several internet companies and continued using his Printed Postage Impression (PPI) account for free despite it being suspended for misuse.

Leeds-born Wakefield, who ran his businesses from an address in The Quays in the city’s Concordia Street had the account because of the large amount of packages he posted out.

The success of his companies, which sold products such as sunglasses and aromas allowed Wakefield to move into an apartment in City Lofts, Tabernacle Street in London’s trendy Shoreditch.

The Royal Mail depends on its PPI customers declaring the amount of postage they used and during the scam Wakefield did not pay a penny.

“There aren’t many areas of business where one may rely on the other to tell it that it owes maybe ten or hundreds of thousands of pounds,” said Kingston-upon-Thames Crown Court Recorder Michael Holland QC.

“It’s quite an open system. One relies on one’s customers to tell them how much is owed.”

Wakefield pleaded guilty to making or supplying articles for use in fraud, namely PPI’s to his company Focus Online between July 30, 2014 and July 8, 2015.

He also pleaded guilty to two counts of obtaining services dishonestly, namely the processing of £31,465 worth of postage between the same dates.

He received eighteen months imprisonment, suspended for two years and was ordered to pay a £15,000 fine and £20,743 cost as well as £1,465 compensation.

During the investigation Wakefield offered to compensate the Royal Mail in full.

Prosecutor Miss Sarah Selby told the court the Royal Mail asses the loss at nearer £101,000, but to prove otherwise is an “impossibility.”

“The system was exploited by this customer. The system is based on trust and the customer is required to inform the Royal Mail as to what type of mail they are posting, how much and the weight.”

In May, 2011 Wakefield’s PPI account was suspended, but he simply continued using it unchecked.

“He continued to use the suspended account number, how is not clear, but they were attached to his packages in large volumes.

“No payments were made in respect to his postage and he instructed his Leeds employees to process orders and use the PPI labels to send them out.”

A random spot check at a Leeds sorting office in November, 3013 prompted a surveillance operation and Wakefield was arrested on July 8, 2015.

His home and business premises were searched and investigators found as many as 168 aroma products had been mailed for free on one day.

“This was a concentrated and sophisticated effort by this defendant to defraud the Royal Mail.”

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