A school governor has been jailed for three years and nine months for his role in a multi-million-pound Covid PPE fraud in which companies were promised millions of boxes of nitrile gloves that were never supplied.
Craig Morris, 43, from Lytham St Annes in Lancashire, was described as having played a “subsidiary but significant” part in the scheme, helping with sales, logistics and false representations. He was paid seven monthly “consultancy” payments of £5,000 by alleged ringleader Jogesh Bhandari, as well as a £200,000 lump sum used to buy a house.
Northampton Crown Court heard that Morris had been a school governor during the offending and had “joined it enthusiastically”. He and Bhandari set up an “umbrella of companies” in 2020 and 2021 to trade PPE during the pandemic, despite having no ability or intention to fulfil the contracts.
More than $4.5 million was defrauded from companies, Judge William Harbage KC said during Morris’s sentencing. The pair were convicted of fraud by false representation and money laundering following a five-week trial at Leicester Crown Court.
Covid PPE fraud used to fund luxury spending
The court heard that money paid by businesses was quickly withdrawn and transferred to accounts controlled by Bhandari and his wife, Meena Bhandari. Prosecutors said none of the money paid to Bhandari, 59, was used for its stated purpose.
Instead, bank records showed spending on luxury cars, Rolexes and other watches, expensive travel and debt repayments. Bhandari also used £126,000 to buy a new red Porsche, while £200,000 was sent to Morris.
In one video recovered by investigators, Bhandari admired the sports car, saying it was “amazing” and that he “can’t stop smiling”. He was also shown an image of a Rolls-Royce and told Morris: “But if I want one of these (a Rolls-Royce) then we need to keep going.”
The first part of the scheme involved an agreement to provide 12 million boxes of disposable gloves to a company called Med18. Prosecutor Michael Bisgrove said Frank Labruzzo, an attorney in the Louisiana Attorney General’s Office, helped by providing a fake escrow service.
Funds paid into the account were moved immediately to Labruzzo, Bhandari and other companies. In a separate deal, Bhandari received a further $2.7 million and withdrew almost $500,000 to repay debts owed by himself and his wife.
He also sent potential suppliers forged documents, including bank statements claiming balances of up to $125 million, along with false references, one of which was provided by Morris. In early 2021, Bhandari received more than $3.18 million for gloves intended for US hospitals, but the order was never shipped.
Later that year, a German supplier was persuaded that Bhandari was a major player in the PPE industry with access to hundreds of millions of dollars. He claimed he wanted to buy more than $1 billion worth of gloves.
Labruzzo supplied a fraudulent letter stating that Bhandari had deposited $35 million as security for the first delivery. The German company was then persuaded to pay $1.35 million for air freight, with the money transferred to a business account controlled by Meena Bhandari.
More than 47,000 WhatsApp messages and emails were recovered during the investigation. In one exchange, Morris wrote: “All over the news is all about PPE shortage. Let’s clean up!! Milk it… fill ya boots”.
Bhandari replied: “It’s about good teamwork and EVERYONE making money.” Prosecutors said the companies claimed to hold millions of dollars, when their actual funds amounted to only $3,000.
Sentencing Morris, Judge Harbage said the frauds exploited the PPE market during a period of “immense international difficulty and concern”. He said the public had been required to “make sacrifices and pull together”, while some people had sought to exploit the crisis, motivated by greed.
“These frauds were committed over a sustained period of time and sought to exploit the PPE market,” the judge said. “They were sophisticated in nature, with significant international efforts.”
Morris’s barrister, Philip Plant, said his client was a father of two teenage boys and a “normal man who has worked hard and contributed to society, bar the period he was involved in this offence”. Nineteen references were provided to the court on his behalf.
Meena Bhandari was convicted of money laundering and sentenced to two years in prison, suspended for two years. She was also ordered to complete 250 hours of unpaid work.
Her barrister said her career as a pharmacist had been “totally destroyed by these proceedings” and that her marriage to Bhandari had been “broken by some of the evidence in the trial”.
Bhandari did not attend court for sentencing, saying he was unable to appear for medical reasons after having a pacemaker fitted last month. Judge Harbage issued a warrant for his arrest and adjourned his sentencing hearing until October 16.
Labruzzo and Cynthia Caronna, who were also involved in the scheme, have already been sentenced in the United States.
