Dodgy Whitby trader sentenced for counterfeit branded goods
A dodgy trader who made a small fortune selling bogus designer clothes on the internet has avoided a jail sentence by the skin of his teeth.
Nicholas Morgan, 37, from Whitby, bought a raft of fake designer labels from a shadowy Manchester outfit known as the ‘Stangeways Counterfeit Group’, York Crown Court heard.
He paid £10,000 for the knock-off goods and sold them on at marked-up prices after advertising the phoney wares on Facebook under the banner ‘Scarborough Brands’.
Prosecutor Sam Faulkes said the sham items included fake Polo Ralph Lauren, Stone Island, Hollister, Adidas and Nike goods including T-shirts, beach wear, sports tops, trainers and tracksuits.
Trading Standards found that £27,359 had dripped into Morgan’s account by way of cash deposits, although it could not be proved that this was all through the sale of sham goods.
Morgan, of Captain Cooks Crescent, was arrested in June last year and admitted several fraud charges dating back to October 2015. He appeared for sentence on Friday.
Mr Faulkes said a Trading Standards officer infiltrated Morgan’s Facebook account and found designer items for sale under ‘Scarborough Brands’.
“Morgan was arrested at his home in Whitby and his ‘business’ premises were searched, and a number of items of (counterfeit) clothing were recovered,” added the barrister.
The counterfeit collection included over £17,000 of fake goods including England football shirts, children’s clothes, 15 pairs of faux designer shorts, three tracksuits and various sporty clothing with Stone Island and Adidas ‘logos’.
Morgan, an ex-con who with a gambling problem, denied he had sold the goods at prices considerably below normal retail prices for genuine items.
But his deception was laid bare when officers traced the goods back to the Stangeways group – Morgan’s “wholesalers” who were also arrested and dealt with in the lower courts.
Morgan had paid one of the Strangeways men £10,000 and designated this as a “holiday” payment to “mask” the dodgy trade-off.
Mr Faulkes said the father-of-two had received warnings from police and Trading Standards as far back as 2009 about the suspected peddling of counterfeit goods following a search of his former business premises, although he was not charged with any offences at the time.
The court heard that Morgan, who works in a local café, had previous convictions and served a prison sentence in 2002 for burglary.
Defence barrister Laura Addy said the “root cause” of Morgan’s problems was his gambling addiction.
“It started with slot machines (and) that progressed to gambling in casinos,” she added. “It’s fair to say he did not have many lucky runs and the balance to the casinos accrued, so that he found himself frequenting rather more unsavoury establishments for his gambling and that took him to Manchester.
“In Manchester… the gambling debts began to spiral, to such an extent that he was ‘advised’ to repay what he owed; that he could and should sell these goods. And that started with these people called the Stangeways Counterfeit Group in October 2015.”
Mr Recorder Harris told the defendant: “This was a planned enterprise and… it was probably a reasonable earner for you, all of course tax-free and cash-in-hand.”
However, he said he could suspend the inevitable jail sentence because Morgan was working full-time, his employers spoke very highly of him, and the fact that he was a carer for his seriously-ill father and was seeking help for his gambling problem.
The 12-month prison sentence was suspended for two years. Morgan was also ordered to carry out 120 hours’ unpaid work and undergo 20 days’ rehabilitation. He also faces financial-confiscation proceedings.
Mr Harris told Morgan, who lives with his parents, that he had “come as close as anybody” could to an immediate prison sentence.