Trading standards officers found that the alleged conspirators had taken off more than seven million miles from the odometers of around a hundred vehicles.
Directors and staff at a prestigious chauffeur company took part in a major “clocking” fraud, a jury at Chester Crown Court was told yesterday, 11th January 2017.
An investigation launched by trading standards officers found that the alleged conspirators had taken off more than seven million miles from the odometers of around a hundred vehicles.
The cars from a primarily Mercedes Benz fleet would then be sold on to unsuspecting dealers and motorists at a huge profit.
Richard Pratt, QC, opening the case for the prosecution, told the jury that it represented a “major fraud”.
The trial of six staff at PCS Events Limited, a Runcorn-based company, and one MoT tester is expected to last seven weeks.
The defendants have each pleaded not guilty to conspiracy to commit fraud. They are John Murphy, 66, the company’s major shareholder, his daughter and shareholder Laura Murphy, 27, her partner Christopher Lunt, 37, finance director Kevin Batty, 55, mechanic Trevor Jones, 57, shareholder and director Paul Arslanian, 37 and Simon Williams, an MoT tester.
Mr Pratt told the jury that the case was about “clocking” cars used by PCS Events which he described on the face of it as a prestigious chauffeur company. Mr Pratt said their clients included Emirates Airlines who employs the company to pick up their First Class and Business class customers.
Their Mercedes fleet was acquired by lease purchase which would come with an agreed annual mileage. Extra mileage would attract extra charges, he said.
Another method used to acquire vehicles was by contract hire agreement which did not always carry the automatic right of purchase on completion of the contract period.
Mr Pratt suggested that had the cars been returned at the end of their lease period they would have attracted significant penalty payments but the mileage they showed on the clock was “way below their true position”.
The barrister told the jury that the company was able to substantially reduce its overheads but the real profits of clocking the cars were made when they were sold on.
The court was told that PCS Events is a close knit company where John Murphy, who owns 85 per cent of the shares, is the controlling mind.
Paul Arslanian, originally company secretary, played a significant role in the company. He is Mr Murphy’s stepson.
Mr Pratt said: “It is the prosecution case that behind the veneer of respectability the defendants who were employed there operated a widespread system of clocking the cars in its possession”.
He added: “Those who manipulate the mileage of a motor vehicle prior to its onward sale can have only one purpose in mind. It is to deceive and defraud.
“We say that in excess of one hundred vehicles it is possible to show by looking at reconstruction of their mileage history they have been interfered with and their mileage reduced”.
Mr Pratt told the jury that the alleged conspiracy was uncovered when Andrew Jackson, a trading standards officer for Warrington Borough Council, received a complaint that PCS Events had been clocking their company cars.
The company had been advertising Mercedes cars for sale on eBay under the username Lunty22. This was the account used by the defendant, Christopher Lunt.
Mr Jackson found that on April 10, 2013 there were three Mercedes listed for sale. He set about reconstructing their true mileage history using MoT certificate records, warranty and service records, the company’s own fuel records and computer generated records kept by Mercedes STAR System.
Normally, the court was told, you would expect mileage to increase chronologically but investigators found “rather significant backward steps”. It became clear to Mr Jackson that the shown mileages attracted suspicion.
“Put simply by looking at the history of these vehicles when they were serviced or received MoT certificates they saw that the mileage had decreased rather increased over a period of time”.
Mr Jackson led a team of trading standards officers and police officers on a raid of the company premises on July 23, 2013. They retrieved a small mountain of files and business records. They were able to painstakingly build a profile of the mileage history of 112 vehicles. The overwhelming majority had been clocked.
When all the mileage discrepancies are added up they come to almost seven and a half million miles that have disappeared from the odometers. We are saying this is a minimum amount of miles removed from odometers.
“We say there can be only one sensible explanation for discrepancies on that scale,” said Mr Pratt. “There was a major fraud taking place within the company”.
Mr Pratt told the jury about one dealership in Stockton Heath, Cheshire, who bought six Toyota cars from PCS Events. During the same period Christopher Lunt told the dealership that they had bought a Hyundai people carrier a couple of months before from a Manchester company.
The dealership bought the vehicle which showed a mileage of 64,000 miles for £8750. It was sold on, in turn, to a motorist from Edinburgh who subsequently complained when work on the car revealed that its true mileage was 73,190 miles, a difference of thousands of miles.
The dealer went back to Mr Lunt who originally agreed to take the vehicle back but he later failed repeatedly to return calls.
It transpired that PCS had acquired the vehicle in 2009, the date of its manufacture. It shows not only that PCS was clocking vehicles but that they were lying to customers, said Mr Pratt.
Chris Hart, a car and truck dealer, bought eight vehicles from PCS Events. He sold two of these on to friends. When these vehicles developed problems it became clear they had been clocked, the court was told. Mr Hart was “understandably annoyed”.
Mr Pratt said that Mr Lunt appears to have been well aware of the situation and “if it came as a shock to Mr Murphy, he did not show it”.
Mr Williams was an MOT tester based in Preston, Lancashire, the court was told. He is expected to tell the court that he carried out MoT inspections on vehicles offered by a man called Steve for cash. He insists that he did not himself “clock” any cars.
Mr Pratt said: “The prosecution assert the very nature of this arrangement bears the hallmarks of fraud. Mr Williams provided bogus MoT certificates that would provide evidence for the accuracy of the mileage.
“Sometimes the conspirators needed a little outside help. Mr Williams provided it knowingly, willingly and dishonestly”.
All the defendants deny the charges. The trial continues.
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