Fraudster ordered to pay back £567k after fake DVD racket is busted
A fraudster who was caught buying and selling thousands of bogus DVDs has been ordered to pay back more than £567,000.
Paul Foster, from Penkridge, imported fake box sets of hit TV series from China and had them delivered to his home, before selling them to customers worldwide on ebay.
The 53-year-old had been sentenced to 16 months’ imprisonment in January 2016 after he pleaded guilty to one offence of fraudulent trading and nine offences infringing the Trade Marks Act (1994) in November 2015.
But at the confiscation hearing on Monday February 12, at Stafford Crown Court, Foster was ordered to pay back £567,000 in proceeds of crime money along with prosecution costs of £36,858.72.
Despite it being his first offence, on sentencing Foster to 16 months Judge Mark Eades cited the scale of his deception.
The court heard that Foster had been a legitimate trader selling films from 1998 until July 2014. But he then shifted to a ‘large-scale’ fraud operation which began to unravel after three months when a courier reported concerns about packages being delivered to Foster’s home in Walhouse Drive, Mr Tony Watkin, prosecuting, said.
A subsequent package was intercepted and found to contain 815 bogus DVD box sets.
Foster was reported to Staffordshire Trading Standards, which searched the address and recovered 1,816 box sets – including 54 different titles including Downton Abbey, Mr Selfridge, and House of Cards – worth about £40,000.
Investigators trawled through Foster’s emails, which showed that he had sourced the products from China and made orders totalling more than £8,500. Via ebay he recorded sales totalling around £60,000.
Mr Watkin told the court Foster arranged for some of the fake DVDs to be delivered to his unknowing mother-in-law and brother in an attempt to throw the authorities off the scent.
He said: “The defendant even attempted to negotiate a deal with his supplier in which he said if goods were seized by customs the supplier would have to bare 40 percent of the losses.
“Also interesting is the prices at which he sold the DVDs, they did not differ hugely from the price of legitimate DVDs. We sometimes hear that buyers knew they were getting a fake product, but this is not one of those cases.”
Foster, who represented himself in court, said he only benefitted from up to £20,000 in profits from the goods.
“£40,000 of stock was taken away so I lost all of that. It was only £60,000 that I sold on Ebay and if you take off VAT and tax it comes down to around £15,000 or £20,000 in profit,” he added.
Judge Mark Eades said: “You went into this operation with your eyes wide open and you did it out of greed. This was fraudulent through and through.”
“It is not just the DVD and trademark aspects but you were also seeking to avoid import duty by having the goods misdescribed.”
The investigation was carried out by FACT, who provide intellectual property protection, and Staffordshire Trading Standards.
Gill Heath, cabinet member for Communities at Staffordshire County Council said: “This confiscation order against Mr Foster is by far the largest order ever secured by Staffordshire Trading Standards and is entirely fitting for the shocking offending by this individual. Counterfeiting costs legitimate businesses dearly and damages the economy and the court has clearly taken these offences very seriously.”
“This is a great result for our Trading Standards team and reflects the hard work of the officers involved in carrying out both the criminal and financial investigation.
“This investigation is also an excellent example of partnership working in the fight against crime, which has subsequently led to the recovery of significant assets obtained through criminality.
“We will always consider, where appropriate, applying for the confiscation of assets from criminals involved in such activity.”