Company convicted for "cheat-switch" effluent fraud

A Scottish company has been prosecuted successfully for a serious fraud which cost Lothian Regional Council an estimated £25,000 in lost trade effluent charges alone. But the council's patient detective work was frustrated once again by the Scottish legal system which failed to bring home to the court the gravity of the offence.

Officers from the council's water and drainage department became suspicions about the activities at Pure Malt Products' Kirkliston site, near Edinburgh, during a weekend visit to the works when they noticed that an effluent volume recorder was not operating even though effluent was being discharged to sewer.

On subsequent visits during office hours the recorder was found to be working normally. The findings prompted an investigation which lasted three months and involved the council fitting an additional meter in the sewer.

Officers made several more weekend visits and photographed the recorder readings for comparison with the meter in the sewer. A picture emerged of the recorder working normally during the week but stopping at weekends.

An expert was eventually brought in to check the recorder installation. Two wires from the device were traced for about 60 metres through the factory and found to end in the General Manager's office, where they were attached to a switch in the wall disguised as a light-switch.

In discharging effluent without recording the volume, Pure Malt breached the conditions of its trade effluent consent and was charged with four offences under the section 24(2) of the Sewerage (Scotland) Act 1968. All were alleged to have occurred in January and February this year.

The company originally entered a plea of not guilty but was persuaded otherwise when it heard of the strength of evidence against it. The case was heard by Edinburgh Sheriff Court on 11 October.

The maximum fine for each offence was £20,000. But the court fined the company only £1,500 for all four. There are no awards for costs under the Scottish legal system.

It was Pure Malt's second recent court appearance for trade effluent offences. Two years ago, it was fined a total of £1,500 for two offences of breaching consent conditions when its Haddington factory overloaded the local sewage treatment works.

After the hearing in the present case, Lothian council expressed disappointment at the size of the fine and said it failed to match the gravity of the offences.

A spokesman blamed the "nightmare lottery" of the Scottish legal system. The council prepared the case for the Procurator Fiscal, the legal officer responsible for pursuing public prosecutions. The Fiscal was well briefed on the significance and fraudulent nature of the offences, but due to a hitch had to be replaced by another only half an hour before the trial. As a result the full import of the case was never recognised by the court.

The council estimates that Pure Malt defrauded it of £25,000 in trade effluent charges in the last year alone, and the investigation also cost many thousands of pounds in staff time.

The company did not leave the matter there despite its lucky escape. Solicitors acting on its behalf pressed the council into altering a press statement which they claimed was libellous and contained words not used in the trial. Pure Malt is believed to have objected to the words "serious fraud" and "cheat-switch".

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