There's been a lot in the papers recently about financial scandals, like the fixing of the Libor rate. Which seems to have amounted to fraud. But those in upper management - the ones ultimately responsible for their company's behaviour - always claim to have known nothing of what was going on, blaming their subordinates. Only those well down the food chain ever end up in court. It wasn't like that in the case of the EUB duty fraud.
"£47,000 FRAUD CHARGE Against Brewery Officials
A charge of fraud involving £47,000 was brought at Edinburgh on Saturday against William Lawrie, managing director of Edinburgh United Breweries; John Archibald Clark, head brewer; David Smith, assistant brewer; and Ernest Wiles, working brewer. The indictment alleged that accused, in concert and in pursuance of a common fraudulent purpose, pretended to Customs and Excise officials that the records kept in the brewery were true and complete records for the calculations of the duty payable; that they had systematically understated the quantities of materials, and secretly carried through brews and deliberately refrained from entering references to them in the records. The period of the alleged fraud extended from October, 1926, to December, 1933, in the case of Lawrie, Clark and Wiles, and from June, 1930, to December, 1933, in the case of Smith. Bail was fixed for Lawrie in £500, Clark in £200, and Smith and Wiles in £100 each."
Hull Daily Mail - Monday 21 May 1934, page 6.
At EUB, it wasn't only the brewing staff in the dock, but the top man, the managing director, as well. Not only was he charged, but the court insisted on him being charged:
"EDINBURGH BREWERS' ALLEGED FRAUD.
MANAGING DIRECTOR AND NEW INDICTMENT
Judgment was given yesterday by the High Court at Edinburgh on the various legal objections made on Tuesday to the Crown procedure in the charge against three brewers employed by the Edinburgh United Breweries.
These are John Archibald Clark, David Smith and Alexander Wiles, and they are accused or defrauding the Customs and Excise of duty amounting to £31,29l. The indictment alleged that the accused acted in concert with William Lawrie, managing director of the firm.
The Court, consisting of Lord Justice Clerk Aitchison, Lord Anderson and Lord Murray, unanimously decided that the case should not proceed to trial on the present indictment without a charge being brought against the managing director, or intimation on behalf of the Crown that it was not proposed to bring any such charge."
Financial Times, 1st January 1935, page 8.
Even more surprisingly, the charges against the junior brewing staff were dropped, leaving only the managing director and the head brewer to stand trial:
"BEER DUTY CASE.
PROCEEDINGS AGAINST TWO MEN DROPPED.
In connection with a charge in the High Court at Edinburgh of defrauding the Customs and Excise of £31,291 beer duty, it is understood that the Crown has intimated to two of the three accused men, David Smith, assistant brewer of the Edinburgh United Breweries Limited, and Ernest Wiles, working brewer, that no further proceedings are to be taken against them.
It is understood that the defendants' solicitor received an intimation to this effect from the law officers."
Nottingham Evening Post - Thursday 17 January 1935, page 8.
It seems very fair to me: punish those responsible for initiating the fraud, not just the poor workers carrying out instruction.
The observant amongst you may have noticed the amount of the fraud is declining: from the initial £51,901 to £47,000 and then £31,291. Was the initial figure just a wild arse guess? Or did they trim down the claim to make the prosecution easier?
Wondering what happened to the two accused? Patience, patience. We'll be getting to that in due course.