A gang accused of corruption, fraud and money laundering during the 2010 upgrade to Farringdon Station was sentenced at Blackfriars Crown Court on Friday.
British Transport Police said its fraud investigators found that a gang of rail employees were involved in bribes so that a firm could secure a lucrative contract.
A whistle blower first alerted authorities regarding Alandale Rail in February 2011.
Prosecutors said Kevin McKee and John Zayya of Alandale Rail made corrupt payments and promised rewards to Innocent Obiekwe, who was working on health and safety for the project, so they could secure the contract to supply safety critical staff as part of the work.
In return Innocent Obiekwe, 42, nick-named by the co-conspirators as ‘our man in Havana’, provided confidential information during the tender process.
The information meant Alandale Rail 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, McKee, Zayya and Obiekwe defrauded the Costain and Laing O’Rourke joint venture CoLOR by claiming for ghost worker shifts, which are non-existent shifts. The lion’s share of the cash from this went to Obiekwe.
Even when practice was uncovered, prosecutors said Zayya continued to send money to Obiekwe by using William Waring. Zayya skimmed from the operatives’ rates of pay and used Waring and his company, Qualitas, to pay the cash to Obiekwe.
CPS Specialist Fraud Division prosecutor Jane Mitchell 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.”
Throughout the investigation, officers identified payments in excess of £140,000 paid to Obiekwe along with other gifts and favours.
British Transport Police Commercial Fraud Squad detective constable Justin Yorke said: “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.
“Obiekwe provided confidential information to Alandale Rail which ensured that they could undercut competitor bids, in order to secure this lucrative contract. He was motivated by greed and took bribes from Alandale Rail employees. The behaviour of Obiekwe and his fellow defendants was scandalous and undermines the legitimate tendering process companies undertake every day. I am pleased with today’s sentences and I hope this sends a very clear message to any groups who may be considering similar actions.
“The scale of the corruption was significant. Whilst 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.”
A Laing O’Rourke spokesperson said: “We welcome the sentences handed down to the criminals involved. Whilst no Laing O’Rourke employees were suspected of any wrongdoing in this matter, we were pleased to be able to assist the British Transport Police in their investigation. We also applaud those who came forward and testified at trial to secure these convictions.”
The sentence for each defendant is:
1. Alandale Rail, now Alandale Track and Civils and not under the Alandale Group umbrella, was fined £25,000 after being being found guilty by a jury.
2. Innocent Obiekwe, 42, of Edgware, pleaded guilty and was sentenced to two years in prison and disqualified from being a director for eight years.
3. John Zayya, 51, of Catford, pleaded guilty and was sentenced to two years in prison and disqualified for eight years from being a director.
4. William Waring, 56, of Ashford, Kent, pleaded guilty and was sentenced to two years on two counts to run concurrently. The first count was money laundering the second count was corruption. Waring has also been disqualified from being a director for eight years.
5. Kevin McKee, 57, of Maidenhead, pleaded guilty and was sentenced to 12 months imprisonment on five counts to run concurrent and disqualified for eight years from being a director.
Network Rail and Costain have been contacted for comment.