Aero Trial Narrative.

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders: http://www.thefedoralounge.com/showthread.php?81945-Aero-Leather-Clothing-trial-update. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.

INTRO: Trial took place over three weeks in April at Edinburgh Sheriff Court. Presided over by Sheriff Alistair Noble, the case was prosecuted by Procurator Fiscal (PF) Ann MacNeill, while the defence was led by Queen's Counsel (QC) Victoria Dow.

The charge he was found guilty of was: Between 8th September, 2004, and 4 March, 2013, both dates inclusive, at Aero Leather Clothing Ltd, Green Mill, Huddersfield Street, Galashiels, *******, Hawick and elsewhere, while employed by said Aero Leather Clothing Ltd as a Managing Director, you William Neil Lauder did steal a quantity of jeans, jackets, other clothing, badges, labels and patches for attaching to clothing, books, bags, trousers, folders and miscellaneous items and accessories valued in cumulo at £194,825 or thereby of money.

SCENE SETTING:

Will Lauder (WL) joined Aero in mid-80s as a teenager, taken by KC on and trained as a leather cutter.
In 2004, Ken Calder(KC) and his wife Lydia (LC) decided to retire to the Highlands where they ran two vintage clothing eBay firms The Original Thrift Shop and The Highland Attic until KC suffered a heart attack in 2010.
On their departure, WL was made managing director (MD), with Amanda Stephens company secretary and Michael Rocks as a senior member of staff, in charge of sales, customer relations and the denim side of the business.
KC took on the title of chairman, remaining the majority shareholder, while WL held approximately a 20 per cent stake. Other long-standing staff, including Julie Leitch, Johnny Minto, Moira Johnston, Julie Kelly and Edith Yardley were given nominal share holdings. LC also remained a significant shareholder.

We join proceedings in 2012, just after the Mark Moyes/Aero US scam emerges: a large number of US customers, more than 100, have been left without jackets after the collapse of what appeared to be a Ponzi scheme run by Moyes, effectively a pyramid scam.
Concerned at the falling profitability of Aero and the impact it was having on her father's health, Holly Calder (HC) joined the firm in 2011 to help boost sales on the website. She works in the Galashiels factory several days a week, the rest of time she is based at home in Glasgow.

Looking into the Moyes situation, KC says he discovered two things:
First, he had not been given administrative access to the sales and financial side of Aero's new website - something that had not struck him as odd at the time as he had little to do with the day-to-day running of the company.
Second, after gaining access, he found that despite cancelling Moyes' line of credit, after previous problems with Moyes running up debt with the company, the US agent had been advanced £8,000 of credit with Aero.

KC found it hard to believe that the current Aero management were unaware of Moyes' debt issues, yet they seemed to be keeping him in business. From this point, he started to suspect there was some sort of financial irregularity within his own company.

KC confronted Amanda Stephens (AS) about the line of credit. She said Moyes had told her that he could not fulfil orders for jackets. Since it was close to Christmas, and she “felt sorry for him", AS had approved the credit.
Unstitching the mess created by Moyes’ collapse led KC to take a more active part in the business again, as the company had taken on responsibility for the orders and “make good on them".

During 2012 KC discovered that under Lauder's management Aero had been “selling jackets for less than we were making them for”, forcing an overnight price hike. During his five days of evidence, KC said that he thought that WL’s “eye had gone off the ball” in relation to the business during 2012, though he did not believe that there had been any dishonesty on his part in relation to Moyes.

However, for the Calders, the Moyes problem hinted at wider issues about the way the factory was being run.
Lydia Calder says she had concerns as far back as 2010; the building was being neglected by WL, who had insisted that they were too busy to clean the place. Also there was little stock in the factory shop, and the canteen was piled high with militaria.
Describing the building as "absolutely filthy”, she told the court that when the matter was raised with WL, he said that it was a factory, this was to be expected and acceptable. She replied that people came from around the world to visit the place, and if it was dirty and poorly stocked “it gives a bad impression”.
She added: “Any time I said anything, I was told they were so busy, they didn’t have time [to clean]”
LC also said that she had found a box of jeans in the factory unsuited to Aero’s aesthetic, and when she asked WL if he’d paid for them, he said no, but it was later discovered he had.
She continued: “I was very worried about Will’s health. It’s hard running a company if you haven’t got somebody there to share the burden.”
The staff situation was also said to be difficult, with the company having trouble bringing in new workers while existing ones were getting older and leaving. LC said that there appeared to be a lack of forward planning to address with this.
LC also voiced misgivings about the company's web site, which she felt “could have been so much better”, and that HC’s return to Aero in 2011 had helped boost sales figures in this area.
LC also said that Lauder had told her he was coming into the factory at 4am, which had led to think “he wasn’t really coping”, but that he never asked for help. She felt unable to ask any questions about the company because it would be seen as interfering.
The Calders said that did not look at Aeros books because both she and KC felt they could "trust him implicitly", and did not want to seem to be seen to be interfering.

Echoing LC's concerns about the factory on her return at the start of 2011, HC had said that the place was cluttered and that there was a sense that WL was not coping. In her evidence, she said the factory was “haphazard” in organisation, but that she put it down to being so busy, adding: “There was a lot of stuff lying around. I got the impression that things were getting on top of them.”

LC also said that they had found a jacket bearing a tag with the name of a former employee who was no longer on the payroll. When WL was asked what was happening, he told them that the former employee "was just keeping his hand in".
She identified the maker as Stephen Toohey, and said that she found he had made 108 jackets while not an employee of Aero.

Around April/June, WL informed them that Sandy Alexander wanted to buy Aero.

Next: Boxes and boxes of Jackets...

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.

The first time the Calders heard the name Alexander Leathers was in October 2012, when the new company announced in the local scottish paper The Southern Reporter.
WL claimed that the roots of AL go back further. In his evidence, Lauder said that he had started talking to Sandy Alexander (SA) in 2011 - "possibly earlier” - about starting a jacket firm.

Long-standing machinist, Julie Leitch (JL) confirmed this, saying that when she was offered a full-time job with Aero at the start of 2012 after working part-time to complete a degree, WL suggested that he would be striking out on his own.
In JL's evidence she said she had been told by Lauder that he had financial backing, and all the stockists were behind him. He also said he himself owned the Aero label.
He told her "everyone else" was going with him, and asked if she would leave too.
JL said that before this conversation none of the other Aero staff had told her about this company. However after WL spoke to her, other members of staff had turned to her and said “now you know”.
JL was sceptical of the new company, telling the court “I didn’t think it would happen”.

Further evidence of WL's preparation to leave came from Roberta Mills, Aero's sheepskin specialist.
Taken on in April 2011 by Lauder as an intern from Heriott Watt textile college, one of the first tasks given to her by him was to copy and cut out hundreds of existing Aero jacket patterns.
A time consuming task, taking RM six months to complete, the finished copies were all hung up in the factory's downstairs storerooms.
WL, RM said, did not explain to her why he wanted this job done, but overhearing conversations within the factory led to her realising that they “were being copied for another business venture”.

Both KC and LC gave evidence that WL had told them that SA had visited the factory and wanted to buy the company for £1 million.
Both said the offer was not sufficient: if they were going to sell-up then they wanted to give staff a five figure bonus for long service and loyalty.
In evidence, KC had said that while what SA had offered was “an okay deal”, but taking into account the size of settlements he wanted to mae to staff, and his children, KC felt it was not a good enough to make him take it.
KC said he believed that it at this point, work began on creating a parallel business that would become Alexander Leather.

When Will Lauder took the stand, he claimed that Alexander had never made an offer. Instead, WL claimed that Aero's Japanese agent, Hiro Tsuchiya had made the approach, and that Hiro knew that there were plans to set up Alexander Leather.
WL added that he realised “by saying it in court it might make his [Hiro] position rather dodgy”.
[For clarity's sake, Hiro was subsequently contacted and has issued a categoric denial that he made any such offer to Aero, or knew about the company]

No-one else mentioned Hiro in the proceedings. When the SA deal was put to the Calders in May/June, LC recalled that Lauder had told them that Mr Alexander was currently in America and would not return until October.
She told the court that she felt the lack of contact during was strange: they “didn’t have anything in writing [from Sandy Alexander] which I thought was odd. He didn't approach us.
“I just couldn't understand why somebody would do something like that.”

Despite being referred to in evidence, SA was not called as a witness for the defence.

Lauder claimed that he took the final decision to move to AL two or three weeks before 24th September, when he left Aero for good.

KC's greater involvement in the running of the factory saw him become concerned by Aero's dealings with Japanese denim label, Iron Heart.
During previous visits to the Aero factory KC had seen "quite a few" jackets waiting to be despatched to Iron Heart's UK agent, but could not find any record of these sales in the company's accounts.
The jackets were a collaboration between the two companies. They carried Iron Heart labels and had distinctively heavier zips than normally used on standard Aero jackets.
KC told the court that only one invoice was sent. This was in September 2012, after the Calders returned to Aero and began going through the business records.
At the Calders' request, an invoice was sent by Amanda Stephens to Iron Heart for £11K
LC told the court that AS had nothing to do with general Iron Heart dealings. It was WL who dealt with the company.

When questioned about this lack of financial records, WL told the Calders that that they would “swap Iron Heart jeans for Aero jackets”. Mr Calder said to WL that this was against company law.

LC also said that the two-year-long deal with Iron Heart was a poor one for Aero.
Aero was well-known and respected in Japan, whereas Iron Heart was a new brand “that nobody knows in the UK”.
She told the court that since Aero could get more money for retail sales than wholesale, she couldn’t understand why Iron Heart - a new company operating on a wholesale deal - was being given precedence over individual customers. Especially when customers were waiting for month for jackets.

When KC looked deeper into the financial records, he discovered "lots of payments" to Iron Heart for jeans. So WL's story of swapping jeans for jackets was "not true".
This sent KC to Iron Heart's web forum, where he found a large number of pictures showing between “50 and 60 boxes" of Aero jackets with distinctive heavy zippers.
A separate photo on the website showed a man wearing a jacket with the comment that he had bought it from the “owner of Aero for a great cash price”.
This was obviously not a reference to KC. Also, KC could find no record of this sale in Aero’s accounts.
(Iron Heart UK agent, Giles Padmore had offered to give evidence during the trial on WL's behalf, but the sheriff rejected the defence's application to have him testify.)

KC decided not to confront WL with this evidence immediately: “I just felt so let down but I didn't want to accused him falsely of something,” he said, but added that he “knew something was wrong.”
The following day, KC and LC were out walking their dog Cally in the Highlands and discussing the Iron Heart discovery.
LC wondered if Lauder had an eBay account, and if he had been selling stuff on it.
KC told his wife that he didn't think this so. Lauder had previously claimed to KC that he did not have an eBay account and did not know how to use one.
Later that day however, KC searched for the accused’s email address on the auction website. He found an account belonging to Lauder with 1,190 feedback entries.
Almost all of them were stock from the Aero factory. This constituted up to 1,800 actual sales.

Among the items sold were embroidered US flight patches. These usually retailed at £25 from Aero. WL sold them for 99p. KC said the cost of manufacturing these patches was at least £8 or £9. WL eBay sales “completely destroying Aero’s market”.
KC said the eBay records also showed that WL started selling on the auction site “almost to the day” that he and his wife left and retired to the Highlands.
He added that the eBay records showed Lauder paused between 2006 -2007. This was when a tax investigation of Aero took place.
When the investigation ended, Lauder re-started his eBaying. KC said that “it got worse”: WL started auctioning expensive LVC jeans for £50. At the time each pair was worth £200.
According to the eBay records, WL only stopped selling when HC returned to the factory.
KC said that the records also showed that Lauder left most of his feedback for buyers between 5.10pm and 5.30pm. WL used factory computers “once the girls left”.

Asked for their reaction to what the Calders had discovered about the eBay sales, KC said that his wife was “beside herself” at what they had found, while he was “devastated”:
“I knew I was going to have to go back to work”, he said. “I didn't want to go back to work.
"And I didn't realise how much of a mess it would be.”


Next Up: Samples, Gifts and Shares

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.


Holly Calder (HC) had already been planning to travel to her parents' home from Glasgow when KC phoned to say that he was concerned about an eBay account he thought was Will's, selling Aero stock.

Arriving at their Inverness home, HC went through WL's eBay account. She felt that her parents' concerns were justified.
She told the court that she had tried to calm her parents, who were “emotional, angry and shocked”, while come to terms with what they had discovered. “There was disbelief and then, ‘how could he do this?,” she said. “I really thought that this couldn’t be what they thought.”

When asked by Ms MacNeill how she felt about the discovery, LC said, “heart broken”.
“I couldn’t believe after all these years that he could actually do that, not just to Ken but to the other members of staff," she said. "He was on a very good wage, dividends were paid. I couldn’t understand why he did it. Driving down [to the factory], I thought ‘it can’t be true, it can’t be true’.”
But LC said that the pile of 40 eBay forms they had printed out proved otherwise. "What can’t speak, can’t lie” she said. She added that she felt “as devastated today as the day we found it out.”

To prevent further theft, KC ordered all staff passwords for the administrative section of Aero's website blocked, then phoned the bank to halt any payments going through at that point. To avoid alerting Lauder to what they had discovered, KC told him that this had been done because the Tax Inspector had been in touch.

On 19th September, LC contacted Amanda Stephens (AS), to discuss the situation. LC told the court that because AS was Company Secretary they were legally required to tell her what had happened, but AS had a statutory responsibility to keep it confidential.
She told AS that they would be coming to the factory to confront WL on Monday morning, 24th September. She gave AS “strict instructions not to tell anyone else what was happening”.

In her evidence, AS said that LC phoned her at the factory and arranged to talk that evening. AS said that during the second phone call, LC said that WL would be leaving by himself, or with the police.
AS then went to Lauder's home and told him what was happening.
When asked why she did this, AS told the court: “I had to get it off my chest. I felt I was put in an awkward position. I couldn’t have lived with myself knowing the Calders were coming to get rid of him."
AS said that Lauder had been shocked by the news, but that their conversation had last only five or 10 minutes, before she left.

According to machinist Julie Leitch (JL) on the morning of the 24th, before the Calders arrived, Lauder told the staff what the Calders were "coming to accuse me of stealing".
Arriving in the factory at 9.30am, HC set her computer up as if it was a normal day, while her parents called WL in to confront him with the eBay records.
LC told the court that it was quite obvious from Lauder's manner that AS had warned him that they were coming and why.
HC said: “My parents presented him with the files and asked him to explain them. He was pretty nonchalant. He looked and said ‘Yeah, that’s my eBay account’. My dad said 'It’s all Aero stock'. Will said it was samples.”
KC said that there was no way that they were all samples, as there were 1,200 items, to which WL said “no way!”
Lauder then changed his story, claiming that the items had “no value”, and that they were damaged or discarded pieces. They had been offered to staff, who had rejected them, and would have otherwise been taken to a charity shop.

KC asked why the items were not being sold by Aero and the cash put back into the company. HC said WL kept asking how much money was involved, but was told by the family "that’s not the the point".
KC told the court that there was no reason for somebody selling almost 1,200 items, describing it as “just greed”.
During the meeting, Lauder was described by KC to be “vague and evasive”. He added: “Eventually, I said 'I’ve had enough of this, I’m calling the police'."

The court heard that Lauder’s son, who had been brought into the meeting, had asked the Calders not to call the police, in return his father would hand back his shares and leave the company. KC said that a shareholders meeting would have to be held that afternoon. They would decide what WL's fate would be.

Towards the end of the morning confrontation, HC asked to see WL’s PayPal account which contained details of all his eBay transactions going back to 2004. Lauder said that he didn’t know how to open up his PayPal details, so HC said that he could use her computer to put in his password, and that she would find them for him.

As HC started to cut and paste the PayPal details regarding the sales from the account, WL left the building. A short time later, she was locked out of the account.

During HC's testimony, Ms MacNeill led HC through items listed in WL's PayPal account. She identified all of therm as being Aero stock. In total, the eBay items sold by Lauder had fetched £10,228. The estimated retail cost to Aero was more than £52,000.

In evidence, Lauder said of the meetingL “I was a bit confused because he [KC] knew all about it.” He claimed that he was “just playing along with it because I was going somewhere else.”

But Julie Leitch said that after the meeting, Lauder passed her work bench and said: “They’ve done their homework”.

Next Up: what the shareholders said and the perks of the job...

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.


Lauder left the factory for the rest of the morning, returning at midday for the shareholders meeting.
Attending the meeting were KC, LC, HC, and factory staff Edith Yardley (EY), Amanda Stephens (AS), Julie Leitch (JL), Johnny Minto (JM), Moira Johnston (MJ), and Julie Kelly (JK). The meeting was delayed so that the latter three could travel across to Aero from the company's second, smaller factory in Moffat.

According to KC,some shareholders were shocked or refused to believe what they heard. Others kept quiet.
KC said: “I didn't get the reception I expected because I think a few already knew what was going on."
He presented the shareholders with folder containing WL's eBay records, and explained that he had been stealing from the business. He also told them about anomalies surrounding the Iron Heart account.
HC also testified that some of the staff seemed to be aware that Lauder was selling stuff on eBay - but said that they did not believe that he was selling Aero stock. JM and JK both said that Will had "built up the firm"
HC said that JK told the meeting that it was widely known around the factory that WL was selling things outside the factory - JK was said to be close to WL. No-one else said they were already aware of the eBay sales.

In her evidence, JL said that the meeting "was a bit of a blur”, but that KC and HC had passed around lots of documents, including “pages and pages” of eBay print outs. At the time, she said, “I didn’t really understand it”.
JL also said that there was “other stuff from Iron Heart” - referring to the lack of invoices for sales . She said that the staff shareholders were well-acquainted with the denim label, having done a lot of work making jackets and shirts for them.
She also recalled being told that WL was selling Aero patches, because KC had said had been selling them for less than they were worth.
“We couldn't believe it, stealing stuff from the company and selling it on eBay," JL told the court. “Will was trying to stick up for himself. I didn't know what to believe.”
She said that she remembered him saying “What do you want me to do, Ken?” and making some reference to shares.
Stunned at what they were being told, JL asked if the Iron Heart situation could be a mistake. KC said that whatever the case was with IH, the eBay feedback documents couldn't be a mistake.

Giving her own account of the meeting, LC said that JK repeatedly said that the eBay items taken were WL's “perks” as managing director.
LC said that Lauder’s leg “kept going up and down” but he did not say much. She added: “I thought, he’s got to say something because if I was innocent, I would have.”
She added that she had wanted to call the police, because she “couldn’t believe that they [other shareholders] believed that this was okay.”
LC said that AS was crying and shaking but said nothing, which surprised LC, who knew AS as a "quite feisty, quite clever, capable woman.”
Asked in court why she was upset, AS replied that she “didn't like what what was happening,” and felt like “everything was going wrong and splitting up”.
She said that Lauder didn’t say much during the meeting other than that he would leave.
LC recalled JM, a leather cutter who worked alongside WL, saying that he believed that the Calders had some hidden agenda. LC denied this, saying that she had cancelled a hospital appointment in order to travel down that day: “I did not want this, full stop. I didn't want my life uprooted.”

In his evidence, JM said he had been at the Moffat factory when he was called by KC and asked to attend a shareholders' meeting, saying that there had been money stolen from the company. KC did not specify who was under suspicion, other than to reassure JM that it wasn't him.
JM claimed not to have taken much in of the meeting, but did say that KC was furious and kept referring to a large folder that he had in front of him, though he did not say whether he knew what was in it.

JK could also only "remember parts" of the meeting, She said KC was “very, very angry”, and kept indicating a big file. JK “couldn't understand what was going on", other than WL had been selling stuff on his personal eBay account.
She told the court that this was “not something I hadn't heard before. I knew he sold miscellaneous stuff.”

When asked about her memory of the meeting, MJ claimed that KC was angry but couldn't “remember what was actually said”. She added that “he was just angry, shouting and accusing Will of stealing”.
MJ recalled that KC had big books in front of him, but didn't say what was inside of the books.
She added: “I remember him [Will] saying ‘what do you want me to do? Hand back my shares?”
MJ said she couldn't remember mention of eBay, but recalled that WL looked worried, and that nobody had wanted the police called.
She also claimed that KC had the locks changed on the factory.

EY was due to give evidence for the defence, but was not called.

At the end of the meeting, it was agreed that Will would return his shares, which would be redistributed among the existing shareholders as compensation for the loss of revenue. In return, the police would not be called.
WL accepted this, and an agreement was drawn up by AS to this effect. KC and LC stipulated that they would not receive any shares because they did not want to benefit from them.
With the agreement signed, WL left the factory for the last time.
However, in a later conversation between KC and WL, Lauder told KC that he would return the shares provided the shares' recipients paid any capital gains tax on them.
KC said he was outraged by Lauder's "greed", and the police were phoned.
He told the court that, with hindsight, he realised that had Lauder not asked for this, the police would not have been called and the contents of his home not discovered.


Next Up: behind the scenes in factory and where the patterns went...

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.


During the course of the trial, the court also heard evidence about WL's relationship with both the Calders and the factory staff.
Michael Rocks (MR), a former senior member of staff and shareholder, gave evidence on Aero's transition in 2004 when KC retired and WL took over as MD.

MR had been brought into the firm in 2002 because of his enthusiasm for the company and his specialist knowledge of vintage denim.
KC had intended that WL, MR and AS would form a core management team that would continue the smooth running of the firm, with MR dealing with customers, suppliers and the company website.

MR told the court how both KC and WL dealt with stress by "shouting and swearing", but that when the KC was there, he “kind of held Mr Lauder in check”.

He said that while his initial relationship with WL was “professional but not particularly friendly", this seriously deteriorated when KC left.
MR said that there were times when the month’s sales would be poor, and WL would not handle it well. He would “shout and swear a lot”. Conversely, when they were good, MR would not receive any praise.

He said that lots of people had been paid off over the year of 2004, and got the impression that Lauder was trying to reduce the wages' bill.
Giving examples, MR said that Lauder had dispensed with the two men who worked in the packing room. In MR's opinion, losing the second man was “a cut too far - the guy wasn't getting a particularly high wage”.
He also said WL had dispensed with his then girlfriend, who later became his wife, Jennifer Lauder, when she was working as a pattern cutter with the firm. She later denied this during her evidence. She said that she left of her own volition.

MR said that he felt WL “saw staff more as a liability than an asset.”

Having worked in the factory for two and a half years, MR said that he left in late 2005 because the situation with WL “became intolerable”, with Lauder screaming and shouting at him. At one point he said to WL: “I think you should show me more respect.”
The final straw came when what MR described as a “trumped-up disciplinary” issue was brought against him by WL.
“I asked him ‘do you want me to leave?’ He said ‘yes’,” MR explained. “It was such horrible place to work, I was happy to leave.”

In his evidence, WL admitted that his treatment of MR was not one of his "finest moments" but said that customers and suppliers found him difficult to work with.

However KC's evidence was that Lauder had contacted him, claiming that he had discovered MR had been stealing from the company and had evidence of “bad service” on internet forums.

KC said that as he “didn’t know Mr Rocks that well, and when Mr Lauder said he’d been stealing, I took his word for it, and we sacked Michael Rocks". He added that the company’s profits had dropped so drastically during this period that he had believed Lauder.

HC joined the firm in January 2011 to develop the website which LC said needed to be improved, and boost sales.
According to Julie Leitch (JL), though he treated HC nicely to her face, WL was saying to the rest of the staff that HC was “getting a big wage”, doing something he could do on a Saturday morning.

When asked about DC’s return, JL said that WL “wasn't pleased about that” either. He said to staff that he was being pushed out, that this was “standing on his toes” and that “he didn't have a say”.

When asked about the effect WL had on the staff, JL said that at time “they felt for him, all the years he’d been working for Ken Calder". She said that “they were on his side, and [felt] that it was terrible that Denny was coming and Holly had come. Nobody spoke to Holly, really.”
JL was asked about the situation in the factory when Holly returned.
“He managed to rile them,” she said. Lauder persuaded staff that Ken would destroy the company within six months
During cross-examination by the fiscal, WL disputed the word “riled”. When offered other options by Ms MacNeill, WL chose that staff were “discontented”.

In her evidence, HC confirmed WL had appeared happy to have her in the building. He said he was “working crazy hours.”
She said that it was actually Lauder who had suggested to her parents that both HC and her brother DC should return - something KC corroborated in his testimony.
HC said: “He [WL] made me feel quite welcome, whereas other members of staff didn't seem so warm”. She said that she felt “isolated”, but thought that she was being a bit paranoid.
When the fiscal asked about how Amanda treated her, HC said that AS tended “not to be such a warm person, so I put it down to her nature”

Roberta Mills told the court that when she first started with the firm in 2011, WL's relationship with HC was okay, but said that said that Lauder and AS “didn't really like the Calders at all”, and bad mouthed them to staff in the factory, saying that they were never there. When questioned further, she said that Lauder referred to them as “The Devil, The Devil’s Wife and The Devil’s Daughter”.
In his evidence, Lauder had said that this was “a kind of a joke”.
The fiscal put it to Lauder that was a “fairly disparaging way” to refer to people with whom he had claimed to have a good relationship.
Lauder replied that during KC's evidence, he had mentioned that Lauder was nicknamed “the man with no blame”.
The Procurator said this suggested that WL did not have a good relationship with the family.
WL repeated his assertion the nicknames were “meant as kind of a joke”.

In her evidence RM said that she had never met KC and LC before they arrived in autumn 2011 for a meeting about Denny Calder returning to the company. RM said WL wasn’t happy about it, and neither were a few other people in the factory.
Consequently RM dreaded meeting the Calders for the first time. She added that she had been led to believe that WL and KC co-owned the firm. Lauder told her that he had a 46 per cent share in the company, and that it was “both their business”

According to LC's recollection of this 2011 meeting, WL had hugged DC and said “great man”. The general consensus was that DC returning would bring an improvement in the profits and general running of the business by taking pressure off WL.

WL said at a subsequent meeting in summer, 2012 he had told KC that he was leaving, but that the chairman had hugged him and persuaded him not leave.
Despite this, WL said that the return of HC and imminent arrival of DC made his position was untenable. That was why he resolved to leave.

JL told the court that when it was mooted in August 2012, that KC might be returning to help with the running of the factory, Edith Yardley, a machinist, had raised a petition against KC and LC, attempting to bar them from the factory. JL said that WL didn’t sign it, but neither did she.

She also said that one of the factory employees was due to head off to Australia, and some of the staff tried to persuade the employee to say that she was leaving the company because KC was returning. The employee refused to do this.

RM said that WL's departure from the factory left everything “up in the air”. Initially, the staff remained. Then after a few weeks,they gradually started to tender resignations and move to Alexander Leather.
RM added that she had not been sure where Lauder had gone when he left Aero, until it was announced that he joined AL.

WL said that a meeting was held at the Glen Hotel in Selkirk with Sandy Alexander’s representative Paul Kenny. Lauder told the court that all Aero's machinists, bar JL, attended, and that 10 staff left to join the new company.

AS told the court that she left Aero on November 2nd to go and work as office receptionist at AL. Asked why she left, she said that she “didn’t like what was going on”, and that others were leaving too.
Asked if she was still on good terms with Lauder, AS said that she left AL last year and “haven’t seen him since”.

LC said that people started to hand their notice in, usually in pairs, but none of them would say that they were going to work for AL. She said that Lauder's son, Brendan, had told them that he was going to work for the Co-op. She said he was still working for Aero when she found out about the setting up of Alexander Leather from an article in local newspaper, The Borders Telegraph.

To protect Aero's intellectual property, KC took legal steps to compel WL from using the company name to promote Alexander Leather, and to stop him using Aero jacket style names. KC said Lauder complied with this

KC also said that moment this action was raised, WL returned a set of jacket patterns he had kept at his home. Lauder told the court that he had been advised by the insurance company that he needed to keep a set of them away from the factory, in case of fire.

KC said that “two-thirds of patterns are copies”, adding that, in his time with Aero, WL had only designed two jackets.

Next Up: Storse!

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.

In the wake of Lauder's departure,along with a number of staff, Aero began rebuilding the business.
KC said that eight former employees, who left because they could not work with Lauder, returned to the company. A further eight Heriot Watt students were taken on to supplement the staff, and were trained up.

However, KC told the court that a new problem arose in mid-November when the company received three or four Aero jackets that were made from steer but had been labelled as horse hide.

Immediately realising the damage the mislabelling deception could wreak, KC put out a joint statement with Horween Leather announcing the problem. It named Lauder as responsible. The court heard that the statement was posted on Aero's website and the Fedora Lounge.
acting for the defence, Ms Dow challenged KC that Horween had not sanctioned the release of the statement. He countered that still had the chain of emails showing that the tannery head, Skip Horween, had agreed to the joint statement.
KC also rejected the suggestion that he issued the statement to "attack the credibility of Mr Lauder."
He said that the statement was issued after suspect jackets were sent to Horween to be examined and identified. 80 jackets had been returned and replaced with new ones.
He said that Lauder was named because only he and the cutter, Johnny Minto (JM) knew of the deception
The defence out it to KC that he had also known and sanctioned the mislabelling.
KC was adamant: “We were in the position of keeping quiet and ignoring [the mis-labelling] or being honest and putting our hands up, the way we had with Mark Moye in America.
"It was a real dilemma for us. Three things could have closed Aero that year, and this was the worst.
"I can’t find the right words… we were cheating our customers."
“If I knew this was happening, I would have been in the factory the next day. I’ve never had a conversation with William Lauder about this. The moment I found out, we were horrified. I’m still horrified. This is still going on. We’re still getting jackets back.”
He added: “It could have killed our reputation we’d spent 30 years building.”

KC was asked to explain the mislabelling of steer for horse, KC said that while there was virtually no difference in the cost of the leather, in terms of wastage, time and labour, a horse hide jacket was £40 more expensive to make than a steer jacket.
He also said that while it would not have been apparent when new, within six months to a year of wear, it would have become obvious to an expert or someone with a bit of knowledge which hide a jacket was made of.

Giving evidence on the mislabelling, Julie Leitch (JL) said that was to do with Iron Heart. She was only aware of the issue when KC returned, and said that a mislabelled jacket had come in.
Asked about the production process of a jacket, JL said that the machinists received the leather panels with tickets stamped by WL and JM that would tell them what type of leather they were dealing with.
She said she had begun to notice that the leather they were being given as horse was much thicker than previous batches. At the time, she did not know the difference the two types of leather. She said that she did now; steer was “more grainy with a shinier look to it”.
JL related that on one occasion WL had shown them steer hide and said it looked exactly like horse hide.
WL added: “you could just shave it", but he then said that "Ken would never go for it.”
She said that in 2011 she started to use what she believed was really thick horse hide for Iron Heart jackets, but thought nothing at the time about WL's comment.

In his evidence, Lauder claimed that the mislabelling was forced on him because the tannery was unable to keep up with demand.
He said “Unfortunately, the tannery couldn’t keep up with production of horse hide. We were using so much of it.”
He said that a decision was taken to use steer hide and mislabel it as horse hide in some jackets. WL said they looked just the same - though he did admit that steer was thicker. Repeating his assertion that all were aware of the deception, he said that neither he, KC, or JM happy about the practice.
WL said that he had a meeting with Skip Horween, who told WL that he believed that steer was a superior leather to horse hide.
WL insisted, that the move was a stop-gap and had lasted just eight months.

During cross-examination by the procurator fiscal, it was put to Lauder that Aero stood to suffer plenty of reputational damage if it was generally known that steer hide jackets were being labelled as horse hide.
WL insisted that people could not tell the difference between the two leather jackets, that they were idenitcal.
Ms MacNeill asked “So what they didn't know, didn't hurt them?”
WL replied: “If you wanted to call it deceiving, it could be deceiving. They got a premium jacket, the skin looks identical.”
Lauder asserted that if he was to present the court with a steer hide jacket and a horse hide one, it would not be able to tell the difference. He added that customers got what they wanted.
The fiscal replied that if people ordered horse hide and got steer hide, "then they didn’t get what they had wanted, did they/"
When asked how long this practice had gone on, WL replied eight months, then claimed that it had gone on after he had left.
WL indicated his own passion for the business. He said that “the product came first”.
Ms MacNeill countered: “You also said you were deceiving customers. That doesn’t suggest you were 'really into the product'.”
Lauder insisted: “They still got a beautiful jacket. Even better than a horsehide one."

Giving evidence for the defence, JM had told the court that the deception had gone on between 2009 and 20012, during WL’s tenure.
He also claimed that in a phone call KC told him to carry on the practice, following the departure of WL, but could not give a date, or an approximate date, when this happened.
Minto also gave evidence that he, JM, left the firm shortly after Lauder.

During his testimony KC pointed to a mislabelled jacket that was part of evidence and said that it dated back to 2007.

KC confirmed that the mislabelling problem continued after Lauder left but without his knowledge. Lauder's son, Brendan (BL), was discovered to have continued the mislabelling with JM
He said “He (BL) was found using larger [steer] skins. I didn’t realise what he was doing.”

KC had previously told the court that they had kept BL on for a month after Lauder left because they did not think he was aware of his father's actions.
He said: “I felt really sorry for Brendan. We kept him on for another month because we thought he was a victim of his father’s greed."

Next Up: An Inspector Calls...

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.


Following initial investigations into Lauder's eBay account, Police Scotland decided to obtain a search warrant for his home in Hawick.
On 4th March, 2013, at around 9.30am nine officers arrived at the terraced 3-storey property. WL's wife was present (with their young child).

Detective Constable Ian Johnston (IJ) of Police Scotland’s Economic Crime Unit, who had led the investigation into the allegations against WL, also headed the warranted search. This involved recording each item of interest taken during the operation, the officer who took it and where it was found.
The officers' interest focused on the two 3rd floor rooms, a study and a larger store room.
IJ said that the former was long but narrow, 10ft-to-12ft by 4ft wide. The larger room was “a decent-sized room, 5 metres by 6 metres”.

Among the items found in the study were 48 plastic binders containing embroidered and painted USAAF patches, plus others that were unfiled; piles of documents, including Aero paperwork; a Dell tower desktop computer and a laptop.
IJ said that the binders were kept on shelves above the desktop computer and on the wall opposite it.
The second room was filled with jackets hung on what IJ described as “industrial-style hangers” around the edge of the room. Jeans and other items of clothing were in a “pigeon-hole” filing system.

Clothing recovered included 160 jackets (75 leather ones - more than twice the number in Aero's showroom prior to KC's return). Also some 159 pairs of Levi's, 47 sets of Lee jeans,18 pairs of limited edition boxed Wrangler jeans and rare WWII uniform reference books.
Other items included Thrift Shop bags from the London shop owned by KC until he sold up in 1984, a USAF flying helmet, plus boxes of shoes that KC testified to be stock bought by Lauder for Aero which KC would not sell as Aero because KC felt the items were outside the Aero aesthetic.

IJ said the large amount of clothing, and the amount of work required to record, remove and store it in Hawick Police Station, meant it was 5pm before the operation was completed.
The sheer volume of clothing seized was too large to be stored at the police station's evidence room, so it was placed in an unused station room and locked.

Two days later, HC and LC were invited to the station where they went through items to identify those they believed came from the factory.
When she saw the seized items, LC said she couldn't believe her eyes: officers had been forced to pile things up in the station corridor while they identified them. She said that if all the stock had been in Aero’s store room, she “would have been delighted”.
Because of the lack of space, police asked for permission to store the clothing and items on Aero's premises for the duration, with the strict proviso that it was not tampered with, or sold.

One item recovered that received particular interest in court was an new, unworn LVC leather jacket, produced for the company by Aero.
KC said that the finished jacket would have gone through an artificial ageing process at the end of production. KC had still been in charge of Aero when these were made. No jacket should have left the factory “un-aged”
He said that its untouched condition meant that the jacket had been removed at some point during its two minute journey from the production room to the washing room, where the ageing process was carried out.
KC said: “This should have been in the factory. There was no reason for it to have been in his [Lauder’s] house.”

Another vintage jacket was identified by KC as being the property of LVC. It had been provided for reference, and should have been returned when the contract had finished.

Police also recovered boxes of Aero jacket labels: KC said “there was no reason they should leave the factory.” There were also labels relating to the Iron Heart/Aero collaboration.
KC said there was “no reason for them being in Mr Lauder’s house. He can’t even sew.”

The prosecution focused on two original 1930’s children’s leather jackets found in the storeroom.
KC identified them as jackets he had bought and painted for Denny (DC) and Holly (HC), his children
He said that the two jackets had been hanging up in Aero's office and “made a nice feature", but said that he would never have sold them. Ultimately he hoped to pass them on to grandchildren.
KC said that Lauder “had not been given permission for any of these items to be in his possession”. In evidence Denny Calder (DC) identified two jackets as having definitely been worn by him as a child.

The property seized at Lauder’s house, based on Aero price lists and manufacturers’ prices, was valued, conservatively, as being worth £144,121 to the company.

When asked about the property recovered, KC said that Lauder “had not been given permission for any of these items to in his possession”.
He added: “I would not have agreed for him to hand his shares back, and walk away if I had known he had 10% of that in his house. I was totally stunned.”

In addition to the Aero stock, the company's archive was also found in Lauder's storeroom.
KC said that the archive contained items of interest including copies of labels previously used by the company, press cuttings and documents relating to Aero’s history. This included the company receiving the Queen’s Award, and the Marlon Brando jacket made for Madam Tussaud waxwork museum.
The archive was stored in a table in the factory.
WL testified that the archive was his property: he had gathered it together and put it in order.
KC said that while Lauder may have "tidied it up" and given the archive shape, all the items were owned by, and related to, the company. KC “would never have given permission for it to be removed”. He said that he felt its presence among the seized property to be “of great significance”.

Next Up: "I earned them. They were my jackets."

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.


As part of DC Ian Johnston's testimony, the jury were taken to a room adjacent to the court to view all the items seized from Lauder's home.

The prosecution called WL's wife, Jennifer Lauder, as a witness.
The former textile student and Aero pattern cutter moved into Lauder's home in 2005 and said she had been aware of items of clothing in the house. JL said WL “ has always been a keen collector” of both vintage clothing and war memorabilia, and had kept them in his house.
When asked by PF Ms MacNeill if she was aware what the collection consisted of, JL said it “wasn't something Will and I talked about.”
The Procurator Fiscal asked JL if she had asked why her husband needed 160 jackets. JL replied that it wasn’t unusual to have vintage jackets in the house.
Asked if she had ever seen WL “coming home with armfuls of vintage jackets?” JL replied that she “never saw him coming home with clothes.”

Ms MacNeill then turned to Lauder's eBay sales account. JL said that she was aware that he had an account, but that she “didn't really pay attention, or was really interested”, although she added that she was aware that he was selling patches.
JL also said that she knew he was buying DVDs on eBay, but again this "wan't something I was really interested in”.

Summarising JL's evidence, Ms MacNeill put it to her: “So, your evidence is that you never asked him about all this clothing in the house and you didn't see him home with it? Where you at home when he came home from work?”
JL replied, “Sometimes”.

In cross-examination by the defence, JL confirmed that there was already a number of vintage items in WL’s home when she moved in, and that he been building a collection when she first met him.

Ms Dow asked if WL brought the clothes in one at a time - ie not in large numbers - or was it "as if he had emptied Aero stock into a van,"
JL said it was the former. She also claimed that KC took items of stock from Aero, because he wore them at work.

Ms MacNeill immediately returned to re-examine JL. She drew JL’s attention to her assertion that she’d never seen WL taking clothing items into the house. Therefore she was “not in a position to say whether they came in one at a time, or in a van.”
JL admitted: “No”.

Following the raid, the police took pairs of jeans recovered from Lauder's house to be identified by Levi's and Lee.
In evidence, representatives from both brands confirmed that the items shown to them were traceable as types sold to Aero.
Both representatives also confirmed that they had not sold stock to either Alexander Leather or WL as a private purchase.
Both said that while samples of jeans would occasionally be given as gifts - as had happened with LVC when KC, LC and Julie Leitch were given pairs of jeans - this happened very rarely, because these items were expensive.

Completing their initial investigation, police decided to interview WL, and a date was arranged for him to attend St Leonard’s Police Station, Edinburgh accompanied by his lawyer on 27th November, 2013.

During the interview, WL was presented with print-outs from his eBay account by IJ.
IJ asked about the Levi’s jeans listed. He told the court: “I think the point I was trying to make was that items were being sold for less than their retail value."
IJ said that WL responded that he didn't think that this was the case.

The Procurator Fiscal moved on to the children’s jackets recovered from WL’s home. They were shown to him during the police interview.
Shown a distinctive, painted jacket that Denny Calder had identified as his, WL said that “Ken gave that to Brendan, my son.”
IJ then pointed out to WL that it had a name plate with 'Calder' on it.
Lauder was shown the second child’s leather jacket and asked when KC had given it to Brendan, who is now 22-years-old. Lauder insisted that both jackets had been given by KC to his son, contradicting previous evidence from both KC and LC.
IJ then presented Lauder with a silk children’s jacket with a map of Germany on the back, and asked “what’s the story with that one?”, to which WL replied “no comment”.
The PF also noted that the transcript of the police interview showed that when WL was asked if he could account for the dropping sales of Aero, he replied “no”.
Although he answered questions about the children's jackets, for the most part Lauder asserted his right to remain silent.
At the conclusion of the interview, IJ said that was decided to place Lauder under arrest and charged him with embezzlement.

Moving on to Lauder’s PayPal accounts, IJ in his evidence said that they contacted the company in Luxembourg and received a CD showing activity in his account.
He said it showed any money coming into the account was spent, and that the two amounts essentially matched up.
WL's eBay purchases included DVDs and a few big ticket items, including a pool table. A similar item had been identified on the ground floor of his home.

Though the police investigation was completed and a report submitted to the procurator fiscal, in February this year, a request was made to IJ by the Procurator Fiscal. It asked for details relating to the eBay accounts of LC's Highland Attic, KC's Original Thrift Shop and HC's At The River’s Edge.

Asked how the Calders responded to this request, IJ said that they “were quite surprised as they did not believe they were under suspicion”, but were “prompt in getting them to us.”

Giving evidence about his eBay activities. Lauder claimed KC knew about him selling Aero stock on the site.
He said: “I knew all about eBay. He (KC) showed me how to do it. He told me to start off selling patches.”
When asked about other items on sale on eBay, Lauder claimed that he used to spend Saturday morning from 6am to midday photographing and putting jackets on to the Aero website. He said that selling factory stock on eBay was his payment for doing that, and had been agreed with KC.

WL rejected the suggestion that he had stolen the items he put up for sale on eBay. He claimed that KC, LC and HC were all selling items and “knew about it all the time”.
All three Calders gave evidence denying this categorically. Both KC and LC stated that the only Aero stock given to them for sale was a box of sweaters that WL had bought from a flood sale, plus some minor trade-in items - a woman's dress and a WWII nurse's uniform - which he could not sell off himself

KC during cross-examination, said: “I would be crazy to sell Aero goods on eBay myself. It wouldn’t fetch the same money.”
He said that it made no sense to effectively steal from his own company, adding: “If I wanted to to take money out of Aero, as the majority shareholder I could vote for it.”
He added: “I could have gone off to foreign climes with a nubile 18-year-old - that is, if I could have found one,”
This raised the biggest laugh in court of the three week trial.

Turning to the items seized in his home, Lauder claimed that he had built his collection up over 30 years. He admitted that the majority of items came from Aero, but said they were either free samples or gifts from the entirety of his time at the factory.

KC had earlier told the court that, aside from his children’s jackets, none of the items were in factory before 2003: “He [Lauder] would need a time machine” to have obtained some of them before then".

The defence asked KC if the seized items could be a collection, as WL maintained.
KC said that if somebody was putting a collection together, “you would get them in your size.” What had been found in Lauder’s house was “not collecting, it’s like a shop”.
KC added that Lauder's items came in a range of waist sizes from 30 to 38, and various leg lengths, KC said the accused “wasn't just preparing for an expanding waist, he was preparing for [leg] shrinkage.”

Lauder had claimed KC took items from Aero, but that it was “no big thing, we were all friends”. He said that he had done “ridiculous amounts of overtime” and hadn’t been paid anything extra.


Continues below...

 

[Sloan1874]

...Continued from above.


Asked about the dozens of patches found at the house, WL claimed that he was given to him by artist Dudley Davies (DD) and embroidered patch manufacturer Nibble, having researched them and had samples made himself.
He admitted they were Aero samples, “but as far I was concerned, they were mine”. He felt he was allowed to take them.
The court later heard evidence from DD . He said he had gifted WL between 30 and 50 patches, and gave him a name-plate maker because although he had never met the accused, "he [WL]seemed a nice chap".
KC had earlier disputed that WL had been given the name plate maker, stating that Aero had passed police documentation that it had paid for it.
He said that Aero had been a regular customer of Mr Davis, and that the last invoice to him was £3,000 in 2011, and there had been 2011, and that there were £2,000 worth of patches were missing,

In cross-examination, Ms MacNeill asked DD how much money he received from Aero in 2000, the first year he did business with the company. He said he could not recall and did not wish to offer an approximate figure. The PF and DD continued a back and forth on this, until the Sheriff eventually intervened and asked DD to come up with a ballpark figure, and he estimated £10,000, though he said it could have been more or less.
The PF also asked DD about his payment by in April 2012. DD agreed he was paid in cash by Lauder. It was sent recorded delivery. When questioned further, he said this form of payment was unusual but said he was about to retire.

The PF examined WL about the patches. Although DD had identified some of the patches as gift to WL, she put it to WL that the rest of the 48 files full of patches belonged to Aero. The company had paid for them and therefore it was the company's property.
Lauder replied that he believed they belonged to him.
Ms MacNeill countered: “If a limited company buys something, it belongs to the limited company. Do you accept that?”
Lauder reluctantly said “Yes.”

After admitting that there were patches among those seized which belonged to Aero, he said that he still felt "that they were mine to sell.”
Ms MacNeill replied: “They belong to Aero, the money received was due to Aero Leather Clothing.”
Lauder responded that he had worked for them. They were his: “I worked overtime for the patches, just as I did for the jackets.”
Ms MacNeill replied: “The money for the sale of the patches, which belong to Aero, would have benefited Aero.”
WL claimed that KC “knew all about this”, stating that he had kept his email name for his eBay account, and that “everything was visible.”
Ms MacNeill then put it to WL that if he had not kept the patches, then HC could have sold the patches on behalf of Aero on the Aero website.
Lauder retorted: “If she could have sold them.”
Reminding Lauder that as MD, one of his main responsibilities was to protect the interests of the company, the Fiscal suggested it would have been better for Aero's finances if the items Lauder had auctioned off on eBay, had been sold through the company and profits returned to the company .
The Fiscal asked: “Do you accept that the money you received for them should have gone to Aero?”
WL replied: “I earned them.”
Ms MacNeill said that the case was the same for the jackets found in his possession. She asked if they would have benefited the company if kept in the factory, not in his home. WL replied “I worked for those jackets.”
The PF said he had not answered the question put to him.
WL said that he had worked in the factory for 30 years and was a valued member of staff, stating: “I earned them. They were my jackets.”
The Fiscal asked the question again. Lauder repeated that they were his jackets.
Sheriff Noble intervened and directed WL to “answer the question that’s asked.”
The PF put the question to WL again, adding that if the property had been in the building, it would have been available for sale by Holly Calder on the Aero website which would have benefited from the revenue,
Lauder admitted “In a way, yes”. then immediately added, “But not really. I had worked for these jackets. Any of these jackets is mine.”
Ms MacNeill responded: “There’s no ‘not really’.”
Lauder insisted: “She couldn’t have put my jackets on the website. They were mine.”
Ms MacNeill repeated her question to WL that, as MD, this was Aero property to be sold by Aero for its benefit.
He conceded: “I suppose so - but they were my property”.

Turning to the financial value to Aero of the goods found at Lauder’s home, Sheriff Noble intervened again, asking “how many jackets are we talking about?”
Lauder replied: “70 jackets over 30 years.”
Ms MacNeill replied that it was 160 jackets. Lauder responded that they weren't all leather.
The Fiscal then asked if WL's position was that the jackets were all part of his salary. He said this was the case, repeating that this was done in agreement with KC.
This assertion of agreement had repercussions later on

Returning to the events of 24th Sept, Ms MacNeill said that, knowing the confrontation was coming, WL’s position at the meeting had been that these items were free samples or of little value to Aero. The PF put it to WL that this conflicted with his current claim that the items sold were part of his employment contract.
WL replied that KC “knew I had lots of stuff at home,” and that he had told him this at the beginning of the confrontation.
Ms MacNeill said that nobody had heard him say this during the meeting. WL insisted he had said it at the start of it. The fiscal retorted that neither AS, HC or LC had heard this.

Asked about the free samples, Lauder said that only some were free. Ms MacNeill said that evidence had been given by reps from Lee and Levi’s, and MR that “no way were these free samples”, adding that the Levi’s witness had said that at most one pair would be given away, not 159 pairs.
WL replied that the jeans were also worked for, with KC’s agreement - "nobody could be given 159 free samples".
Asked about the 47 pairs of Lee jeans, WL told the court that he contact the Lee rep ahead of arrival at Aero, and tell them what he wanted [as samples].
Ms MacNeill pointed out that the jeans were stock taken from Aero. WL replied that it might have come from Aero but he “worked for it. Very hard. In a package agreed by Ken Calder”.
This prompted a return to the previous circular argument, with the Fiscal asserting that it was Aero’s property and Lauder claiming that it was his as payment for overtime.

During questioning about the 159 pairs of Levi’s found in Lauder’s house, Sheriff Noble asked how many of the pairs were free samples, to which WL replied 40, adding that it cost Levi’s just £50 each. The rest he said he had paid for. This contradicted expert evidence heard earlier that that the base price was much higher.
Sheriff Noble asked how many of the 47 pairs of Lee had been given to him free.
WL said “many”, claiming again that he could simply phone ahead of the arrival of the company rep and request them.
The sheriff asked what WL believed the proportion of the £144,000 of items found in WL’s house to be retail stock, setting aside gifts and free samples
WL said £30,000 to £40,000. He said that this was not a lot in eight years as MD: “That’s not a lot when I was working ridiculous hours, 30 to 40 hours of overtime [a week].”

At the end of the defence's evidence, Ms MacNeill re-called KC to the stand. He was recalled because this was new evidence from the defendant, which had not been entered prior to the start of the trial.
KC was brought back from Inverness to Edinburgh to respond to Lauder's claim that the stock he had taken was part of a package agreed by him.
Ms MacNeill asked KC if this was the case. KC replied: "Absolutely not. That's ludicrous."

With that, both the prosecution and defence ended their evidence.

Next Up: Nobody Saw Nothin', Right?

 

[Sloan1874]

NOTE: the aim is to make this a single document giving narrative and detail from the Aero Leather Clothing trial, and therefore if it could be kept comment free, perhaps directed towards the existing trial update thread, that would be great, though be aware that any comments will be removed by the bar tenders. All of the content on this thread comes from the trial's text, except where expressly stated. There is nothing here that wasn't given in evidence by either side of the case.

After 12 days of evidence, prosecution and defence delivered their closing submissions.

The prosecution was first to address the jury. Ms MacNeill stated that by returning to Aero after WL had left, KC was potentially "signing his own death warrant". Having already had one heart attack, the long hours and stress of rebuilding the company could have damaged his health.

In a speech lasting 40 minutes, she said that idea that KC and LC made malicious allegations as revenge on WL for leaving and setting up AL was ridiculous. She stated their honesty was "beyond doubt", and that there was enough evidence to convict WL beyond reasonable doubt.

She pointed out that WL appeared to agree that the goods had come from Aero. Taking property without someone's permission amounts to theft.
The accused had claimed that KC had permitted WL to take property from Aero. KC had been absolutely clear that this was untrue.

Ms MacNeill said that, despite telling the court he had no real business head, WL also asserted that he had built the company up. WL claimed that everything the Calders had, was down to him.
She said that this was evidence of WL's sense of entitlement. He regarded Aero as his firm, and felt he could take what he liked.
Ms MacNeil said WL’s business acumen was not on trial: "It’s not about the management decisions he took as MD, or the company's performance under his management. The charge in front of you is theft, and that’s what you must judge.
"Nobody denies he worked long hours and everyone recognised that… he was juggling a lot of issues."

However Ms MacNeill drew the jury's attention to the fact WL allowed credit to be extended to Mark Moye, as well as agreeing a poor and illegal [in company law] deal with Iron Heart. WL had been allowed to make these decisions because he was the MD and trusted implicitly by the Calders
Even when the Calders grew concerned about the company's performance they didn’t think WL was up to something - they just couldn’t figure out what was going wrong. The had been "devastated" when they discovered what Lauder had been doing.

KC had told the jury that his wife had “aged 20 years in two years" as a result of the company chaos and criminal investigations. Ms MacNeill told the jury that these were not the words of someone who sought to unseat his MD from his post

Turning to the confrontation between Lauder and the Calders on the 24th September, 2012, she said that despite having been tipped off and having the whole weekend to prepare, WL never saaid "Hey, Ken, you said I could take this in lieu of overtime".
Ms MacNeill continued: "At no point did [WL] say 'this was overtime'. He just said it was samples. Now two-and-a-half years later, we hear from him that this was in his contract, an agreement, to take stock for overtime."
Regarding the defence’s claim that KC and LC had also been selling stock, MacNeill reminded the jury that KC’s eBay records were open to scrutiny and his recollection of where items were bought from “crystal clear”.

She added that, even if the jury did think that KC had been selling stock, “it doesn't follow that Mr Lauder is innocent of theft. Two wrongs don’t make a right. It doesn't validate his theft.”

Ms MacNeil also drew the jury's attention to the fact that in the 23 years that the defence witnesses had worked with Lauder at Aero, none of them had seen him removing any stock, including jackets and jeans. [Ms MacNeill does mime of somebody staggering as if they're carrying a pile of jackets] And that’s because he didn’t do it openly, The removal was clandestine - because he knew he did not have permission."

Presenting closing arguments for the defence, Ms Dow spoke for 20 minutes. She said that because Lauder was on trial, it would be easy for them to believe "he must have done something". However the legal standard was that the prosecution must provide corroborated evidence, of "sufficient quality and standard", and must be "proof beyond reasonable doubt". If the jury is not convinced of the prosecution's case to this standard, Ms Doubt said, "you must dismiss the charge. A strong suspicion is not enough".
Ms Dow then set out points which she believed showed the prosecution had not proved its case beyond reasonable doubt.

She suggested to the jury that KC had been "evasive" in cross-examination. She reminded the jury that Michael Rocks had said that KC was aware that Lauder had been selling items such as zips on eBay - yet KC had said he was shocked when he discovered WL's personal account.

She also recounted WL's evidence that it had been common occurrence for him to send KC and LC items of Aero stock to sell on their eBay sites.
Referring to the formation of Alexander Leather, she said that 10 members of staff, including shareholders, had seen fit to leave Aero and follow Lauder there.

Returning to WL's evidence, she reminded them that he had told the shareholders's meeting that he had done nothing wrong. She also reminded them that WL had said KC knew all about his eBay sales - and that the outcome of that meeting was that the police were not called. She recounted that the Calders did not call the police until three weeks later. By that time they had discovered WL was joining Alexander Leather.

Ms Dow also referred to the Aero-Horween statement on the mislabelling placed on the Fedora Lounge. WL viewed this as an attempt to discredit him. Ms Dow referred to evidence from both WL and his fellow-cutter Johnny Minto that KC was well aware of the mislabelling.

She said Lauder had maintained his position that his eBay site had sold a combination of free samples and low value stock, and that it was done with the agreement of KC. She said that he had also "come out of the safety of the dock" to give evidence, something he did not have to do.

Ms Dow reminded the court that Lauder had told them he was so devoted to Aero, that it competed with his wife for his affections. After all that had happened he was "heartbroken" about leaving Aero. She also reminded the jury that WL was a collector of vintage clothing, and had spent the past 30 years with Aero building up his collection - "a long time".
Ms Dow said that there were sufficient grounds for the jury to have reasonable doubt about charges, and should therefore either find Lauder not guilty or not proven.

Following Sheriff Noble's direction, the jury retired to consider it's verdict. After two hours discussion, including lunch, they returned a majority guilty verdict.
NB: this jury finally numbered 13, due to absenteeism and illness. A majority verdict needed to be at least 8/13

Deferring sentencing until 29th May for social work reports, Sheriff Noble said that "[given the] very serious charge, all options will be available".

To Be Concluded...

 

[Sloan1874]

Conclusion: the sentence

Will Lauder appeared in court five of Edinburgh Sheriff Court at 10.45am on May 29th. Addressing Sheriff Alistair Noble, WL's defence, Victoria Dow QC, said that he continued to insist that he was innocent of the charges.
She highlighted the fact that he continued to live his wife and three-year-old son in Hawick, and said that the financing of their home "could be compromised by any element of custody".
Referring to the social work on Lauder, Ms Dow said that LW had no previous convictions and had been assessed as being at low risk of re-offending, adding: "Therefore he is suitable for a community-based disposal.
"He is fit, able and capable of carrying out such a disposal."
Addressing the question of compensation, the defence said it was not there "for the purpose of retribution", and asked that this be kept in mind when considering it.
Sentencing Lauder, Sheriff Noble said: "You’ve been convicted of stealing just under £195,000 of property belonging, with the exception of a few items, to the company of which you were managing director. In part, this may have been because you felt you were insufficiently rewarded for the work you were doing for the company, but the remedy for that is not theft.
“You had been given substantial control of the company following the retirement of Mr Calder. They held you in high esteem and trusted you implicitly. Through your actions you utterly betrayed that trust.”
He added that though he had "given as much credit" as he could for Lauder's first offender status and his family background, "the gravity of the offence makes custody inevitable and unavoidable", and sentenced him to 21 months.
The question of any compensation was not dealt with during the hearing.