John Gaines, 72, of Leamington Spa, who swindled his workers while operating under four assumed identities, was ordered at Warwick Crown Court on 20 January to pay £91,934.21 under the Proceeds of Crime Act (POCA). The Security Industry Authority (SIA), who brought the original prosecution, requested that £58,000 of the confiscation order be paid as compensation to the former employees that Gaines had defrauded.
Gaines was jailed on 14 November 2019 following a lengthy jury trial at Warwick Crown Court. He was sentenced to 4 years and 8 months imprisonment after being found guilty of 22 counts of fraud. Gaines had employed individuals on security contracts and then ended their employment without paying the wages that he owed them.
Many of Gaines' victims appeared as witnesses in his trial. Gaines recruited staff who were easy to exploit; recent arrivals from other countries, those with health problems, or those living in homeless hostels. If staff raised concerns about their treatment, Gaines threatened them with the sack and subjected them to verbal abuse.
Passing sentence, His Honour Judge Potter deplored Gaines' "systematic exploitation of vulnerable individuals for profit" and referred to the 21 security operatives "left in hardship" by his dishonesty.
Mark Chapman, of the SIA's Criminal Investigation Team, said:
The ruling in this case concludes a lengthy and complex investigation, which took almost three years to bring to court. Mr Gaines employed dozens of security operatives to work for his different companies across a number of contracts. He then deliberately failed to pay the wages he owed. When challenged he evaded, threatened, and bullied his 'employees' claiming their work was substandard or they had incorrect documentation. This was untrue, and 21 of his former employees gave evidence at his trial. Following Mr Gaines' conviction for multiple frauds, the SIA has used its Proceeds of Crime Act powers to identify money and property held by him and asked that the court compensate his victims from the money that he has been ordered to repay.
The court in the POCA hearing ascertained that the total criminal benefit from Gaines' illegal activity amounted to £445,336.84. It heard that Gaines had £91,934.21 currently available to him following the court finding that he holds a beneficial interest in a house in Enniskillen. Gaines has three months to pay the sum or face an additional 12 months in prison. At the end of that period Gaines would still owe the full amount ordered by the court. Gaines remains liable for the outstanding criminal benefit amount, which the court will continue to pursue.
The case was brought to the SIA's attention in 2016 following a series of complaints to the police and Action Fraud. These complaints related to companies that were under suspicion of failing to pay security operatives. Analysis had shown that several of the companies in question shared e-mail addresses and phone numbers. This information was passed to the SIA by the Government Agency Intelligence Network (GAIN).
The SIA, in conjunction with Warwickshire Police, arrested Gaines in October 2017 and seized material linking him not only to the businesses in question, but to several alternative identities.
Notes:
- the Proceeds of Crime Act 2002 (POCA) sets out the legislative scheme for the recovery of criminal assets, with criminal confiscation being the most commonly used power (confiscation occurs after a conviction has taken place)
- if a person has a POCA order against them, they have to pay it regardless of if they serve a jail sentence
- by law, security operatives working under contract must hold and display a valid SIA licence
- read about SIA enforcement and penalties
