Episode 18 Saints and Scroungers

In this country, the money we pay as taxes goes to provide essential services that we rely upon every day

and it's there to give us a safety net if things go wrong or life takes an unexpected turn.

This help comes in the shape of vital financial support that improves lives.

At one point, I just thought I can't do this no more.

But there are some people who see that money as something they deserve, even when they don't.

Clearly, she was able to make significant profits.

This is the world of Saints And Scroungers.

Saints And Scroungers takes a look at the welfare system,

those who pinch from the public purse and those who don't even realise what's available to them.

Every day across the UK, teams of investigators identify and bring fraudsters to justice

while the saints make sure those who are in need get what they're entitled to.

Coming up on today's show...

A multi-agency raid on a lock-up reveals more than expected.

This was the first time we found this activity linked to a trademarks investigation.

And a lad brought back from the brink of a life of crime or even death.

Carl always said, "James, get a grip of yourself."

Del Boy and Rodney, a couple of lovable rogues selling their gear down the market.

Well, this is the market.

So where are they?

OK, "A", it's a Wednesday.

There is no market on a Wednesday.

And "B", these days you'd be more likely

to find Del and Rodney selling their dodgy gear on the internet.

Online auctions are a brilliant way of supplementing your income

by getting a few quid for some of your unwanted items.

But when you start buying items to sell online at a profit, it's no longer a little trade-in.

You become a trader and it's your legal responsibility

to register as a trader with Her Majesty's Revenue and Customs.

In November 2009, 34-year-old Caroline Urua

had a little one-to-one lesson in the finer points of this

from Justin Miller, an investigator for Southwark Council.

We were initially contacted about this case

when the UK Border Agency seized a consignment of hair straighteners at Heathrow Airport.

They told us they were destined for a Caroline Urua at an address in the Old Kent Road.

Now, this Caroline might have just been hoping to make a quick bob.

Maybe she's got a very full head of hair.

The officers already had their own suspicions.

The investigation team thought that because of the amount of items she had tried to import,

it was highly likely that these weren't for personal use.

That was by the by as the UK Border Agency were pretty convinced they were also counterfeit.

The UK BA seized the goods, so they never actually got sent to Caroline.

Justin and his team were now seriously interested in Caroline

and wanted to see whether the hair straightener business could be figured out.

Taking into account that there was likely to be more items there,

we obtained a warrant from the courts, so we could gain entry to the premises and carry out a search.

So, in December 2009, a warrant was issued

and the team struck gold, or had they?

When officers started searching the flat,

they found a lot of items which were very suspicious.

They seized them because they suspected they were counterfeit. That included 850 items of make-up.

And they weren't just any brands.

These were high-class brands like Chanel, Christian Dior,

Ugg, Lancome, Mac, Gucci

and even top-selling hair specialist, ghd.

The question was - were they the real deal?

Once we returned from Caroline's,

first we had to establish that the goods were counterfeit.

We suspected that they were, but we needed the trademark owners to confirm to us 100% that they were.

ghd confirmed to us that the items were indeed counterfeit.

And it wasn't just ghd.

Brand representatives from the majority of the seized goods also confirmed that they were fakes.

This is all sounding a little bit dodgy.

As well as the goods, officers found a laptop there.

We suspected that might contain evidence, so that was seized.

Part of the investigation was to look where Caroline was selling these items.

We established at a very early stage that she was selling them via online auction houses.

The team now suspected that Caroline was flogging fakes for a living and brought her in.

We carried out an interview with Caroline under caution and we asked her about the counterfeit goods.

She confirmed they were her goods and she was selling them.

The investigators wouldn't let this one drop and took items from her address as evidence,

but when the officers returned Caroline's personal possessions,

they happened to spot her binning some shredded paperwork and confiscated that as evidence.

One roll of sticky tape later, it turned out to be a financial bond.

What we actually found was Caroline had savings of at least £53,000 and she was claiming benefits.

We're not just talking a little bit of benefits here.

Caroline was getting incapacity benefit, working tax credit,

child benefit, housing benefit and council tax benefit.

Unsurprisingly, a fraud investigator from her local council started having a dig.

According to the council's records, Caroline was a single mum claiming income support from the DWP.

As a result, she was also claiming council tax and housing benefit from us

which amounted to £370 a week.

That's £19,000 a year on top of the £53,000 in the bank

and the potential trading of counterfeit goods on the internet.

We wanted to find out a bit more about Caroline and her background,

so we spoke to our colleagues in the Revenue and Benefits Team

and they were very interested in the fact that we had found an account with £53,000 in it.

So we've got a case that was initiated by the UK Border Agency

with evidence from the HMRC.

We've got a pretty suspicious-looking benefits claim

and an enormous savings account being investigated by Justin Miller from Southwark Council.

They were able to take steps to stop the benefit being paid to her.

Benefits are meant to be paid for people who need them, not for people who have got savings of £53,000.

Well, that's one problem taken care of.

But it was at this stage that the investigation took a different turn.

The computer forensic expert identified documents which look like they were being used in a fraud.

We were finding forged bank statements, scans of people's passports,

details of companies registered with Companies House. It was more than just someone into counterfeiting.

OK, let me get this straight.

We've got a benefits cheat who was claiming over 19 grand a year

with a stash of counterfeit luxury goods,

a savings account with 53 grand in it

and now forged bank accounts and undeclared businesses.

While we were carrying out our investigation,

our colleagues in the Benefits Team started investigating Caroline's background.

They started looking into her financial background.

They obtained copies of her bank statements and they were able to share those with us.

We found that Caroline was paying for a self-store unit down the Old Kent Road.

We thought we'd get a warrant because it was highly likely we would find more evidence in there.

More evidence?

She's already siphoned off around £190,000.

How much worse can this get?

For now, it's farewell to the fraudsters and hello to the people we call our saints,

those in society who help others in genuine need, but who are too proud

or don't know how to claim what's rightfully theirs.

Young people... They're terrible, aren't they?

If you read some newspapers, you might think so.

In fact, you might start to believe that all of society's ills stem from people under the age of 18.

But then that would be without understanding the fact

that sometimes those young people come from very difficult backgrounds and from very underprivileged areas.

So here's a question.

If that's you, can you turn your life around and make a difference?

That's a question that was faced by 21-year-old James.

At the age of 11, he started to find himself getting into quite a spot of bother.

My mum and my stepdad, they wasn't pulling in a great turnover

and the money that was coming in was just enough to survive on.

Me and my brother really wasn't up to no good.

I live next door to a school, so we'd go in there at weekends,

climb roofs, rip off lead and smash windows,

just doing teenager kind of things, which obviously are criminal things,

but we didn't really see it as that.

And exactly the sort of things you'd expect to read about in those papers,

so why aren't kids like James in school?

I wasn't academically for school. I couldn't read or write or spell.

Them kind of things I just struggled with and when you're in a class of 30 people

and these guys are flying ahead of you and I'm kind of behind...

In primary school, I was really struggling.

I was just really angry.

It doesn't sound like a great start to school life.

I got excluded a couple of times in primary school.

My main one when I got permanently excluded, I think that kind of hit home a bit

because I was used to just getting away with things.

When I went to secondary school, a big fight kind of broke out

and the three of us got permanently excluded for it.

'This sounds like a kid about to go off the rails. Time for a little chat.'

At the age of 11, it sounds like not only have they given up on you,

but more importantly, you've given up on yourself?

How old was I? I think I was about 12, 13.

I think I robbed a Galaxy bar or something silly like that.

I got outside the shop, a guy came out, grabbed our group, searched us all.

He took us back into the office. He said, "I'm calling the police. You've been robbing from the shop."

'To make matters worse, James was carrying a penknife, so he and his friend were arrested.'

I remember being in the cell for 16 hours

and seeing the look on my mum's face...this ain't good kind of thing.

'James had been in trouble before, but this was shocking for his mother Valerie.'

My heart just went bang and I said, "James, what are you doing?"

My head just went everywhere and I said, "Right, you're grounded for the week, James."

'This was serious and things had spiralled way out of control.'

OK, so school's thrown you out.

Is there any kind of education after that?

I got referred to a PRU, which is a Pupil Referral Unit.

That's where all the naughty kids go, pretty much all the kids who have been permanently excluded.

I remember being at home when I got a knock at the door.

I remember seeing a guy there with...

quite a smart kind of guy, big built, bald head, a folder.

"What's this? CID?" I opened the door, he said, "Is your mum here?"

I got my mum who came down. Basically, he said, "Hi, my name's Carl.

"I work for an organisation called Enthusiasm For Young People."

I was like, "It's 8.30. Why are you knocking on my door?"

"We've got a youth club on that's on till ten."

I think you had to be 14 and a half or something like that.

I was just under age. He actually lied to get me in.

It was like a nightclub.

No alcohol, obviously. It was dark, strobe lighting, loud music,

people dancing and people having fun.

-So he actually bent the rules for you?

-Yeah.

-Did that have an impression on you?

-Yeah, massive.

I thought this guy's all right.

It sounds like the first time someone's taking a risk, sticking their neck out for you.

'So this youth club sounds like a better place for a 13-year-old lad to be,

'rather than out on the street making mischief.

'Why was James head-hunted to join this youth club and what is Enthusiasm?'

We knew there were several kids

that were identified who needed that support.

James came up on our radar.

So, basically, we got James's name sent to us and we got his address.

"Can you go and try and engage with this kid? Can you see if you can help?"

'One of Joe's team, Carl, was assigned to look out for James.'

Carl is this presence in your life

that is opening the door and saying there are other ways to do this, other ways to lead your life?

When you go to school, if you had a rubbish day at home, they don't know that.

He was letting them know why I might be the way I am.

So him having been through a lot of the same experiences and further than you'd gone,

he had the authority to talk to you about what you were going through and that made the difference.

Yeah, so through school I got an E in English, E in French,

four GCSEs in Science, I got two Ds, I think a B and a C.

I was happy. I remember showing Carl. He's like, "Yeah, I'm proud of you."

I've never heard them kind of words, someone saying, "I'm proud of you."

The journey that you'd taken to get grades at GCSE

when the inside of a jail cell was looking like the most likely environment for you

from the age of 12, 13, that is a big deal.

That's where he was speaking to his boss, "We've got this young person. What can we do?

That's where Joe and Paul, they came up with a programme called Youth Academy.

It was an option to see how to become a youth worker.

You know what I'm saying?

It was like a year's kind of course

where we got shown the ins and outs.

'So James was given a chance by Enthusiasm to be able to use his past experience,

'both the good and the bad, in a positive way for the future.

'And it's people like James who provide an important role model for kids in his own home town.'

I think an absence of positive male role models is massive, massive.

The breakdown of actually people being able to get jobs impacts on why we have these problems.

And if you've been brought up in a situation

where the people who brought you up didn't know what they were doing, what are you handing down?

'So the charity had designed this course to train mentors just like Carl

'to be moral guides to kids from the community.'

Can we talk about your brother?

My brother was really close with me because he grew up with me.

We shared a room and we wore the same T-shirt.

If I got into trouble, he got into trouble, so we was a unit.

We experienced everything together.

I remember being away with work.

I remember it was... I think it was ten o'clock at night.

One of the youth workers had to go to the office to answer the phone.

He goes, "James, your Auntie Marcia is on the phone." "It's about Alex."

I'm like, "What has he done now? Has he got arrested?"

She goes, "Oh, he's died."

She goes, "Oh, he's committed suicide."

And that word "suicide".

I think I could have dealt with it if he got hit by a car,

but suicide, that's taking your own life.

-Could you make any sense of it?

-He's made a choice. Every choice you do comes with a consequence.

If you're happy with that choice which he clearly was, I've got to accept that.

'Having found a way to accept his brother's death

'and stay on the right track,

'James then faced yet more tragedy...

'..this time involving his friend and mentor Carl.'

I got a phone call from his wife.

His car had veered off the road, crashed into a tree and he's died.

I thought, "Is this the way my life is, everything around me, everything good around me just dies?"

I lost my brother and I lost the closest thing I could probably call a brother to me.

And I was just lost. You know what I'm saying?

'Carl had gone and with him went the support structure he had created for James,

'but James still found strength in some of the things that Carl had taught him.'

Carl always said, "James, get a grip of yourself and get back on your feet.

"All through life you'll be knocked down."

For that period of my life, I'm thankful that I met him

because in some ways, if he didn't come about, who knows where I'd be?

I know how much it means to be a voice for somebody who ain't got a voice

or to be that shoulder for someone to cry on or that person who stands up for somebody.

Sometimes I might be wrong, but I know.

'The support structure provided by Enthusiasm gave James the strength to help not just himself,

'but also his mother who during these tragedies had also suffered from a number of strokes.'

I'm proud of James. He's gone that far.

Keep doing it. That's all I've got to say, James.

If you want to be the manager, keep doing it. I love him.

I really, really love him to bits.

'James has been saved from a life of being supported by the state, either on benefits or in jail,

'and he's earning money thanks to Enthusiasm.'

I don't think I've ever heard a story of someone turning their life around so dramatically

in such a short space of time

and the reassuring thing is that James seems to know that it's not a fairy tale.

He's got to work hard at this day after day

if he's going to honour the memory of the brother and mentor that he lost along the way.

It's also nice to realise that the experiences that James has had and the mistakes he's made

can help to serve a new generation of kids growing up

that he can mentor here in Derbyshire.

So take an unemployed single mother claiming every type of benefit that's being offered to her,

add shedloads of counterfeit goods, a bulging bank account

and a number of businesses and passports,

and what do you get?

Guaranteed work for weeks if you're an investigator.

Caroline Urua had been claiming incapacity, working tax, child, housing and council tax benefits,

amounting to a total of £190,000 over ten years

when the seizure by the UK Border Agency of a box of hair straighteners

kick-started a massive, multi-agency investigation.

Southwark Council raided her home, seizing fake goods and a laptop.

The investigation got to the stage

where we were investigating the counterfeit goods,

the Benefits Team were investigating the fact

that Caroline had been claiming benefits she wasn't entitled to,

and we also had the computer forensically examined.

The examiner said, "Come and have a look. There's something on here."

What, I mean, something other than the fake goods business? What next?

The analyst showed us a lot of the documents that he'd found on the computer.

There was a mixture of Word documents and PDF documents, either bank statements or utility bills.

But they seemed to be the same sort of transaction,

so a bank statement would have the same transactions on, but with different people's names.

Sounds to me like a bit more than just creative accounting

and the team at Southwark thought so too.

This is an example of some of the bank statements we actually found.

There's a number of transactions and it's a Halifax bank account.

If we look at the next one, again it's exactly the same transactions, a different person's address.

But this time it's in the NatWest.

But if we scroll down, we'll actually see there's still a reference to Halifax PLC.

When we actually look up and click on the NatWest logo,

if we remove it, we actually find there's a Halifax logo underneath it.

So what is going on?

An investigation that started with dodgy make-up and benefit fraud is growing by the minute.

The team knew there was more to Caroline's scam than met the eye.

We'd done a number of investigations in the past,

but this was the first time we found this kind of activity linked to a trademarks investigation.

It just didn't ring true that it was linked to that kind of offence,

so we thought there was something more to it,

but we knew we were going to be prosecuting Caroline

and we would then do a proceeds of crime confiscation, so my next step as the financial investigator

was to obtain production orders on all of her accounts.

And when he says all her accounts, he's talking about over 30 of them

with a combined balance of £1.7 million

and no evidence of a Lottery win.

When we started looking at these transactions,

what we found was that there's £1.7 million-worth of transactions.

Yet this was also a woman claiming housing benefit, money reserved for people struggling to pay their rent.

1.2 million were contra-entries

where it had gone from one account to another account to another account,

so fresh money into the account was about £500,000.

The reason why it had gone from one account to another account is a typical money-laundering technique

to disguise the provenance of where the money has actually come from.

When we informed Caroline that we had executed a warrant on her storage unit,

she became very concerned about how the investigation was going and what we were going to find out.

She said to the investigating officer, "I might just leave the country."

At this stage, I was getting a bit worried that the money might actually go with her.

What was making Caroline so twitchy?

When we looked in the storage unit, we found more ghd hair straighteners,

we found about £20,000-worth of counterfeit software,

we found an actual passport identical to one of the scans found on her computer

and also a chequebook and banking documentation relating to a shop selling hair products.

Caroline had been well and truly caught out

and court is where she found herself, beginning with the Inner London Crown Court,

facing charges relating to the products in the lock-up.

She pleaded guilty and she was sentenced

to eight months in prison, suspended for 12 months.

She also had to do 140 hours' community service.

OK, that's the products dealt with. What about these bank accounts?

Part of the restraint order required Caroline to tell the court of all the accounts she had.

We found another two accounts that she hadn't mentioned to the court

and these had a combined balance of £34,000.

The fact that she tried to conceal two accounts meant that she was prosecuted for contempt of court

and as a result, she received a custodial sentence of six months, suspended for six months.

So, two sentences, eight months and six months, both suspended,

but on top of this, there was a proceeds of crime investigation

to try to recover some of the money made illegally.

The result? She's got to pay back £107,000.

And while we're talking of money,

what about all that money in her accounts?

According to the council's records,

Caroline was a single mum claiming income support from the DWP.

As a result, she was also claiming council tax

and housing benefit from us which amounted to £370 a week.

We were extremely interested to find that she was earning an income

and had a bond in her name of in excess of £50,000,

neither of which had been declared on her benefit claim form.

She told us that she did have a child and that she had been trading online since 2009.

All the accounts that were identified, she reported as being her boyfriend's,

even though he was living in Nigeria and couldn't have opened them

and they were in her name.

In total, she had overclaimed £13,000

of housing benefits and council tax benefits.

She wasn't entitled to that benefit.

Following on from the interview, we had confirmed sufficient facts

to be able to take the case to court.

She was charged with five acts of dishonesty under the Social Security Act.

She initially pleaded not guilty, but on the first day of the full trial, she changed her plea to "guilty".

She was sentenced to 12 weeks' imprisonment for each matter, suspended for 18 months.

In addition, she had 120 hours of unpaid work.

Caroline was charged on five counts,

specifically failing to declare a change in circumstance to Southwark Council

and the Department for Work and Pensions,

also with making false representations to the banks.

Phew, what a case! It's enough to make your hair curl.