Council errors led to collapse of major fraud trial

A judge has criticised a council's handling of a £5m fraud case that collapsed due to poorly handled and lost evidence.

Derby City Council's trading standards team brought a prosecution against Motor House UK in 2019, which led to the arrest of five men accused of fraudulent trading and fraud by false representation relating to individual vehicle sales.

However, the subsequent trial collapsed after it was found trading standards officers did not fully catalogue, copy or review evidence seized, making it impossible to know what evidence was available.

In his ruling, district judge Chris Carter said "systemic failures" by the team made a fair trial "impossible".

The city council said it accepted the ruling and had taken steps to ensure it did not happen again.

An operation, led by the trading standards team, was launched following a raid on the firm's Alfreton Road premises by Derbyshire Police in 2019.

During the search, officers seized thousands of files including invoices, customer records and refund documentation.

The haul was so large, a van was needed to transport the seized material from the business premises.

Those arrested and charged - Mark Whitfield, Sukhvinder Rana, Shane Wilson, Jordan Whitfield and David Crossley - all pleaded not guilty to all counts against them.

According to one defendant's legal team, the alleged fraud was said to involve about £5m.

The trial began on 5 May but was stopped on 12 October, Derby Crown Court said.

Donna Dowse, the trading standards officer in charge of the case, told the court not all of the material seized by her team had been copied or scanned before it was reviewed or returned.

Although the council had the capability to make copies of all the documents, "that course was not adopted", the judge said.

Instead, officers undertook a "selective extraction exercise".

According to the prosecution, large amounts of the original paperwork were returned.

Dowse also told the court seized evidence was not always properly sealed, and there had been problems maintaining a clear record of how documents were handled and stored.

She also acknowledged systems she subsequently devised to attempt to reconstruct continuity contained errors and inconsistencies.

The judge also highlighted serious concerns over the role of former trading standards contractor Ray Bigg, an ex-police officer who played a key part in the investigation and the raid.

After leaving the authority "under a cloud", original seized documents, witness exhibits and investigation records were found to have been kept in his personal possession, including material later used at trial.

Dowse said she was unaware Bigg had retained the evidence personally and accepted there was no record of when it had left secure storage, what had been removed or whether everything had been returned.

The judge described the situation as "astounding", noting Dowse's acceptance that some material had been returned in an unsealed carrier bag and the integrity of the evidence chain had been compromised.

Defence counsel for the five men said this was not just an argument about disclosure failings, but about the "irreversible loss of evidence".

The judge ruled the missing records were "central to the factual questions determining guilt or innocence".

He concluded a fair trial was no longer possible and stayed the indictment as an abuse of process.

The stay means the allegations were never tested to a verdict, leaving the defendants neither convicted nor acquitted.

In his ruling, the district judge said: "I am satisfied, on the balance of probabilities, that the defendants have been denied the means of properly challenging the prosecution case. It follows that a fair trial is no longer possible.

"As I have reached that conclusion, and this is a limb one abuse argument, once I reach that conclusion no balancing exercise arises.

"I cannot permit an unfair trial to proceed and the indictment must be stayed."

A spokesperson for Derby City Council said: "This trial was the culmination of a complex and lengthy investigation into matters that go back at least eight years.

"The council accepts the ruling, acknowledging the challenges faced during the investigation and subsequent trial.

"There is learning already under way to address the evidential shortcomings identified within the judgment.

"The immediate focus on that learning should provide reassurance to Derby residents and businesses about the council's commitment to providing an effective and efficient trading environment within the city, that puts the highest standards of consumer protection at the heart of service delivery."

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