AUDACIOUS criminals have cost North-East public bodies thousands of pounds in a “sophisticated” fraud attack – with one hospital trust losing more than £250,000.

Tees, Esk and Wear Valley NHS Foundation Trust, which provides a range of mental health services for more than one million people living in County Durham, Teesside and North Yorkshire, lost £261,260 in the scam.

The trust, which centres include West Park Hospital in Darlington, Auckland Park Hospital in Bishop Auckland and Winchester House in Peterlee, was unable to recover any of the lost money.

Middlesbrough Council paid out £236,477 to the scammers, although £197,718 was recovered.

The fraudsters extracted cash by fooling organisations with forged letters pretending to be from legitimate building firms, already carrying out work for the public bodies.

In each case, a bogus email, fax or letter was sent which would supply new bank details for existing contract cash to be paid into.

Some of the letters sent were complete with company logos, false signatories and reference numbers.

However, these accounts were in fact controlled by the criminals, and the cash was diverted and then laundered on through overseas bank accounts.

Overall 21 organisations were targeted, resulting in a loss of £12.6m.

Northumberland, Tyne and Wear NHS Foundation Trust was also targeted, but ignored the bogus email, with a spokesperson confirming it was picked up by “routine” monitoring.

Sentencing ten of those involved in the scam at Leicester Crown Court last week, Judge Philip Head said: "This was a sophisticated and widespread fraud in its conception and execution."

Jailing the conspirators for between ten years and 22 weeks, he added: "These bodies were selected because it was hoped their accounting processes would be vulnerable."

"The loss falls necessarily on those who are not able to pay it, ultimately the members of the public whose taxes fund these bodies,” he added.

The conspiracy's "trusted lieutenant" Stephen Tyndale, 47, who lives in London, was jailed for ten years each for conspiracy to defraud and conspiracy to launder money, to run concurrently.

Asif Habib, 53, from Dubai, 44-year-old Imtiaz Khoda of Lancaster, 36-year-old Abdul Naeem from Redditch and his brother Mohammed Nadeem, 33, were all jailed for conspiring to launder the cash.

Habib was jailed for 40 months, Khoda for 54 months, and the brothers for 67 months each.

Father-of-seven Oghogho Ehanire, 42, of Preston was jailed for 12 months suspended for two years for laundering.

Also given suspended sentences were 46-year-old Yagnesh Patel of Surrey, who received 15 months, 48-year-old Zahid Muhammed of Glasgow who received 21 months and Abdul Ghaffar, 68, of Redditch, who received 22 weeks.

Tariq Khan, 35 who lives in Essex, was jailed for eight months and ordered to repay £20,000 to the Lincolnshire NHS trust after admitting perverting the course of justice by supplying false documents to police.

An 11th person, Monica Thomson, 40, of Airdrie, in North Lanarkshire, will be sentenced for her part in the conspiracy next month.

Middlesbrough Council confirmed the scammers used information found on their website to identify genuine suppliers regularly in receipt of large contractual sums.

When the genuine supplier contacted them to say no payment had been received and that no request had been make for a change of bank details, they “moved quickly to recover the situation”.

Cllr Nicky Walker, Middlesbrough Council’s executive member for finance and governance, said: “The rapid spread of online banking has brought with it new risks, and the need for ever greater vigilance against this kind of fraud.

“Thanks to the issue being highlighted quickly, followed by prompt action by the council and its bank, the vast majority of the money was recovered.

“Our processes for approving suppliers’ details were immediately tightened to prevent a similar fraud happening again.

“We have also worked with the National Anti-Fraud Network (NAFN) to highlight the potential risk of fraud to other public bodies who are required to publish ‘open data’ on their supplier payments.

“It is also pleasing to note that those responsible were caught and have now received substantial jail terms.”

After a Lincoln-based NHS hospital first raised the alarm, investigation work by detectives from Lincolnshire Police led them to uncover a "seamless process" of a fraud and money laundering operation crossing international borders, involving not just the UK, but Europe, Africa and the Middle East.

After sentencing, Detective Sergeant Mike Billam, who led Lincolnshire Police's investigation, said: "This investigation has got to the heart of this conspiracy and has disabled what was clearly an international organised crime group."

"The sentences handed out to ten defendants reflect the fact that these individuals, motivated only by their own personal greed, have sought to take the taxpayers' money."

He also praised other UK forces, the Crown Prosecution Service, NHS Protect, and the work of the NHS computer forensics department, in helping secure the convictions.

The Northern Echo approached Tees, Esk and Wear Valley NHS Foundation Trust, but nobody was available to provide a comment.