Ikea buyer jailed for fraud

1 November 2007
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01 November 2007 | Antony Barton

A former buyer for furniture chain Ikea has been jailed for two years after accepting more than £1 million in bribes.

John Brown pleaded guilty to corruption charges at Birmingham Crown Court last month, and in addition to his jail term was ordered to pay £15,000 costs. Sales colleague Paul Hoult also received 13 months' imprisonment for taking bribes of more than £280,000.

The judge in the case said the two men's "moral compass was broken by greed" and a jail sentence was necessary to deter others.

The two evaded Ikea's purchasing limits to obtain orders from companies run by Adam Hauxwell-Smith, who was sentenced to three years' imprisonment. Ikea's policy prevents it from taking more than 40 per cent of a supplier's turnover, to prevent over-reliance on Ikea's business.

But in this case Ikea took virtually all supplies produced by Hauxwell- Smith's companies, which provided Christmas crackers, pot pourri, candles and kettles, accounting for nearly all of its turnover. The Serious Fraud Office, which investigated the case, said Hauxwell-Smith dictated what Ikea would order, based on the goods he had available.

Hauxwell-Smith also paid the two Ikea staff to prevent this being discovered and to ensure his companies' supplies and invoices would be approved.

The offences took place between 1998 and 2000. Staff became suspicious at discrepancies between amounts invoiced and goods received. The case was referred to the Serious Fraud Office after an internal inquiry.

A spokeswoman for the store said: "Ikea has fully supported the work of the SFO and police."

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