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The total filched by three men who spent five years defrauding Newark and Sherwood District Council taxpayers will never be known, it emerged this week.

The lack of paper records of purchases at Kelham Hall and a computer system breakdown at multi-million pound software company Black Box Network Services means the full extent of the fraud will remain undiscovered, say the police.

They say the council failed to realise it was being fiddled because the fraud happened within the IT department, and no one outside that section understood what happened within it.

Speaking after court hearings in Nottingham this week, Detective Inspector Andy Gowan of Newark said the fiddles started when the council’s head of information services, Clifford Sanderson, forged a cosy working relationship with Blackbox’s regional sales executive, Steven Dudley.

This led to contract backhanders.

Both men pleaded guilty at earlier hearings to conspiracy charges between January 1, 2001, and May 12, 2006.

Two other defendants entered guilty pleas to theft charges on Wednesday, and a third was cleared.

Inspector Gowan said council employees abused their status and defrauded the taxpayer and their employer.

“The fact that they were in such an insular area, IT, helped them to feather their nests.

“Newark and Sherwood District Council has learnt from this already and I have no doubt that we will scrum down together afterwards and discuss it all.

“What fuelled the investigation and led to the prosecution was the suggestion that Blackbox received preferential treatment from the council for IT contracts.

“This was borne out by the guilty pleas of Sanderson and Dudley.

“The council has a tendering process which needs to be adhered to, monitored and cross-checked.

“There were also the allegations of theft of computer equipment by the [council] employees, so it was a two-pronged investigation.”

He said the investigation was prolonged by the absence of records at Kelham Hall and Blackbox.

“The scale of the fraud will never be known.

“This was a close-knit department and clearly people outside that department found it very difficult to understand what happened within it.

“These are very technically-minded people.

“Their knowledge helped them and hindered everyone else.

“The council is obviously going to get some flak for this but they called us in at the appropriate time.

“We didn’t lose any evidence that we’re aware of.”

Detectives spent six months gathering and cross-matching evidence.

They were given specialist help by two of the council’s audit team.

Sanderson (46) of Bridegate Lane, Leicester, pleaded guilty in August to conspiring to steal from the council, conspiring to defraud the council and possessing a sawn-off shotgun.

No evidence was offered on five counts of making an indecent image of a child and he was cleared of those offences.

Dudley (34) of Beeston pleaded guilty to conspiring to defraud the council.

Sanderson’s deputy, Paul Chambers (44) of Mansfield, pleaded guilty to five counts of theft of council laptops on Wednesday.

The third-in-charge, Paul Corcoran (39) of Clipstone, admitted ten thefts of laptops and one theft of a hard drive.

No evidence was offered against either man on the charge of conspiring to steal from the council, but a charge of conspiring to defraud will lie on file.

No evidence was offered on Wednesday against Mr Michael Jones (47) of Halesowen, a Black Box employee, and he was cleared.

The three had been due to begin a four-week trial.

Judge John Burgess bailed Chambers and Corcoran but warned them they should not see that as an indication they would not be gaoled. The thefts crossed the threshold of custody, he said.

All will be sentenced on March 12.

Mr Richard Town (38) of Edward Jermyn Drive, Newark, a council employee, and Mr Geoffrey Kemp (45) of West Bridgford, were cleared at previous hearings.

Money and technology equipment taken by Sanderson, Corcoran and Chambers was used to develop Sanderson’s pet project, a community radio station that he began at his home in Leicester.

The three were all directors of the station, now known as The Eye, which still broadcasts in Leicester but without their involvement.

The council initially suspended all the employees involved on full pay. Sanderson resigned and the others were sacked at the time that they were charged.

All apart from Sanderson, have lodged claims for unfair dismissal with an industrial tribunal.

This week, the Advertiser asked the chief executive at Newark and Sherwood District Council, Mr Andrew Muter, if he wished to apologise to taxpayers on behalf of the council, for laxity in its monitoring procedures.

He said the apology should come from the defendants.

He described what happened as a betrayal of trust rarely seen in public office.

Mr Muter, who became chief executive after the offences were uncovered, agreed that the council should have picked up on what was happening in the five years before a whistle-blower came forward to alert them.

The council’s internal audit revealed criminal activities were probably being committed and the police were called in.

“This involved a manager in a senior position and his immediate subordinates. They were obviously able to cover up a lot that systems might otherwise have exposed,” said Mr Muter.

“It began at a small level and they got bolder as they went along.”

He expressed his disappointment that the evidence on the conspiracy charges against Chambers and Corcoran was not tested in court and said he would be writing to the Crown Prosecution Service to ask why.

Mr Muter agreed the true cost of the fraud would never be known.

He said: “The issue for me is trust rather than volume.

“There are now systems of control to ensure that an exact replica of this cannot happen again.”

He claimed that other organisations might have swept what happened under the carpet and simply have got rid of those involved, but the council had elected to do all it could to aid in their prosecution and would do so every time there was evidence of criminal acts being committed by staff.

Black Box Network Services, according to its website, is a national company that designs, builds, installs and maintains computer network infrastructure services.

Through Dudley, it was a sponsor of the radio station.



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