Man sentenced over fraud at engineering firm

A budding entrepreneur became the “victim of his own success” by being sacked from his job for fraudulently using his employer’s machinery to run his own business.

The illegal operation also led to John Birdsall, 28, of Heathcliffe Gardens, Scarborough, appearing before York Crown Court for sentencing, having previously pleaded guilty to a charge of fraud by abusing his position.

Since losing his job, along with two other employees who helped him, Birdsall has since set up an operation at home to produce the items, which he had designed himself, for sale on eBay.

The court heard that Birdsall now also has a rival, his former employer, R and R Engineering, of Scarborough, who started producing similar items after his departure.

The managing director of the company, Russell Beck, whose own son, Darren, was one of those he sacked over the issue, was said to have estimated that the illegal operation between December 2008 and July last year had cost £26,367 in time and materials.

However, Ruth Cranidge, mitigating, said that Birdsall, who paid for the metal used and did the work at the firm in his lunch breaks, calculated that it only cost the company the wear and tear of the machinery and the power used – under £5,000.

Birdsall, who sold £43,000 worth of the fraudulently produced items on eBay, even produced a DVD showing the manufacturing of the items on his own, less sophisticated machinery, proving that it took half the time and less costs to create each item than claimed by Mr Beck.

In the end Ben Campbell, prosecuting, said that they had to accept that the loss to R and R Engineering was probably in line with Birdsall’s calculations.

The court heard that Birdsall has set up with his fellow sacked colleague, Darren Beck, to produce the stainless steel shower drainage channels and fish pond cascades, although the fledgling business was not yet making a profit.

Miss Cranidge said that, at the time the fraud came to light, Birdsall was on the point of approaching another local engineering firm about producing the items for him so that he could keep his job of 11 years.

Miss Cranidge said her client was a “victim of his own success”, having started producing the items in his breaks to see if it would work and then realising that people were keen to buy them.

She added that, at the time of the offence, workers at R and R Engineering had believed that doing work for themselves in their own time was an accepted “perk”, although the managing director later said he disagreed and had not known it was going on.

Birdsall was conditionally discharged for two years, although he was warned by Recorder David Hatton QC that he still faced a further court appearance for a Proceeds of Crime Act hearing on October 7 to determine his assets and calculate his benefit from his criminality.