I first heard of the Cadco Affair when I fell over it during research for the next book. It was literally a strange footnote in the history of the Airfix company during the 1960s.
(And before you ask, NO! I do NOT collect model airplanes. I am NOT an expert on them. Please don’t even TRY to enter into correspondence with me about the specifications or the pros and cons of the Messerschmitt 109E fighter plane versus the Messerschmitt 110C fighter-bomber.)
Hence the Airfix research – for a mere minor detail, which might end up as only a line or two in a forthcoming book.
But the main ingredients in the Cadco Affair intrigued me, from its high finance and low dealings to its dramatis personae, including the very rich and famous – and its immediate victims such as the daughter of Hungarian businessman Nicholas Kove, the man who founded the Airfix empire. Hence that footnote.
The Cadco Affair also involved a large amount of sausages. Most of them only ever existed on paper, and it’s these virtual sausages that add a further surreal and farcical twist to the scandal.
* * *
Rewind the tape to March 1958. Shortly after floating Airfix on the London Stock Exchange, and only three weeks after the death of his wife Clothilde, Nicholas Kove dies at his home on Finchley Road in London.
So their daughter Margit inherits the family fortune. Now married and known as Margaret Mary Elliott, she will stay on the Airfix board of directors until 1965. But long before that she is best known around town as Mrs Elliott the “society hostess”.
(Bit of a demeaning and diminutive term, eh? Did they never talk of “society hosts”, as in the male variety? Anyway…)
Much of her time and money are spent flitting back and forth between the casinos and gambling dens of London and the ski resorts of St Moritz and further afield. In the sunny Balearics she keeps a hilltop villa in the exclusive Camp de Mar, as well as three yachts in Palma de Mallorca, and we’re not talking scale models. To finance this lavish lifestyle she has begun to sell off her Airfix shares.
Around the start of 1963 Mrs Elliott has befriended a fortysomething gent called Dennis Loraine. We know they met while she was on holiday in St Moritz that January. He is handsome and smartly dressed, he entertains in style and on a grand scale, he does much air travel (and always first-class) and stays in the finest hotels.
He also has a fleet of cars that include a Jag, a Rover three-litre and some sort of Aston Martin. She later visits him at his apartment in Rome – where he has yet more cars, a chauffeur, a maid and miscellaneous other staff – and at his more modest house at Storrington in Sussex.
He is also said (mainly by himself, admittedly) to have been a star on the West End stage and a Spitfire ace in the Battle of Britain. This dashing figure appears to be a right Biggles (if Biggles had had more wives and girlfriends) (and if Biggles were a bit younger) (and if Biggles were a sausage manufacturer).
And here comes the sting…
In March 1964 Mr Loraine approaches Mrs Elliott in Rome with a modest proposal. Among his many business interests, he says, is a meat factory in Sussex. It has recently won a huge contract to supply 350 schools, so he needs to expand with a new sausage-making plant in Scotland. Why Scotland? It’s complicated.
Rather than Scotland, at one stage it might have been Ireland, because he was planning a plastics factory there with government grants, in a “depressed area” and via an Irish-registered company called Paraglas Ltd. The Irish project never took off.
It can be like that, though, when you’re a serial entrepreneur with complex deals, juggling so many irons in the fire as it were. Mr Loraine tells Mrs Elliott that he’s also hoping to buy a factory in the south of Italy to process fruit and veg, and he’s looking for finance for the latest blockbuster movie he’s working on. You might have heard of it. It’s called The Death Ray of Dr Mabuse and he’s the producer (though not in the credits for some strange reason, but how was she to know in an age long before IMDb.com?). All very complicated.
She agrees to lend him £272,000 for the Scottish sausage project, and to provide references and several very large bank guarantees. In return she will get 20% of the equity in his film company Anglo/Italia Films, 20% of Cadco Italiana, a directorship of both companies, and revenue from the Dr Mabuse film.
If all this sounds somewhat shady, bear in mind that in England at the time many rich people would have been on the lookout for shadowy ways to sneak the bulk of their wealth out of the UK and beyond the clutches/radar of the Inland Revenue.
Months pass, Mr Loraine persuades Mrs Elliott to invest even more, until it transpires that Mr Loraine – and his deals and promises and indeed his sausages – are all a bit too good to be true…
* * *
Dennis Loraine is a serial fraudster, a Casanova conman. At least four times married, a complete novice in sausage making not to mention film production (no, being a one-time movie extra doesn’t count), he has been convicted at least twice for his confidence tricks.
In one such scam, for which he was jailed for six months in 1952, his accomplice posed as a clairvoyant, telling a middle-aged widow that a handsome young man was about to cross her path. The accomplice is dubbed “the professor”.
Enter Dennis Loraine, handsome, young, path-crossing and swashing his buckles or whatever you do when you’re about to make out that you’re an RAF squadron leader and son of a South African baronet, only you’re a tad strapped for cash this week what with the delay in processing your inheritance and so on.
Yes, it does remind me of the Internet’s oldest hustle, the “Nigerian email scam”.
The Brighton butcher’s
If that sounds like a sordid little swindle of some of the poor widow’s savings, it pales into comparison with the way Loraine acquires the small butcher’s shop in Brighton in 1959. At times these first steps in his sausage empire read like some bad parody of the colonial conquest of half a continent.
The shop’s owner, one S.J.E. Thomas, has only been running it for two years. But he has been far too lenient towards those who owe him money, and is consequently slow to pay his own bills. One particular customer, a Mrs Mollie (or Molly?) Loraine, has run up a butcher’s bill of £160. A massive amount, equivalent to well over £3,000 in today’s money.
Her husband Dennis tells Mr Thomas not to panic, that he’s an air freight plane navigator on a salary of £400 a month, and that his wife Mollie is “an air stewardess on the same plane”. Dennis Loraine then persuades Mr Thomas to enter into a bizarre arrangement to solve his immediate cash-flow problems.
It goes something like this: Loraine will discharge his own bills and pay off Thomas’s debts; in return they will form a partnership and split future profits 20-80 between Thomas (who will stay on as an employee) and Loraine (who won’t do a tap of work).
This highly unequal and unfair partnership lasts only a month, after which Loraine forces Thomas to sell up in order to pay off some further debts to Loraine that Thomas has allegedly run up in the meantime. Thomas is kept on as an employee until illness forces him into hospital, and he is duly sacked.
In summary, Loraine has wheedled his way into Thomas’s Brighton business then forced him out of it in little more than a month at virtually no cost to himself.
Royal Victoria Sausages Ltd
Having acquired the entire butcher’s shop, Loraine forms a company: Royal Victoria Sausages Limited (or “RVS”). The word “Royal” is there because he has also bought an old sausage recipe which supposedly contains a seasoning called Royal; the word “Victoria” because the product is made on the premises in Brighton on Victoria Terrace; and “Sausages” because that’s what the product allegedly is.
You could not make it up – or in Loraine’s case, you could. The Registrar of Companies is persuaded to register the company name thanks to a cock-and-bull story that the bangers were a favourite of King Edward VII while still Prince of Wales. Later again the RVS company stationery claims that the business was established in 1850. It must do, surely, because the letterhead includes a crown symbol.
I will spare you the details of how the sausages themselves were processed and stored by RVS. It’s a bit like that old quote often attributed to Bismarck (“Laws are like sausages – it’s better not to see how they are made”). But the Wurst is yet to come…
* * *
As Mr Loraine has explained to Mrs Elliott, his plans involve not just the Italian factory AND the Dr Mabuse film AND the three new sausage factories in the distressed mining area of Glenrothes in Scotland. He and his colleagues are promising two thousand permanent jobs on the forty-acre site, AND a piggery, AND a supermarket in town, AND an ice cream factory, a film studio (to be run by movie idol George Sanders no less, and Sanders is also a director of Cadco), and a pig fattening venture on the shores of Lough Ness.
But behind the scenes Loraine has been diverting the dosh from Cadco and these other new ventures to his failing RVS company back in Brighton. Cadco has become a colossal scandal involving millions in state funding and loans, and more again from its banks and investors.
The pig in a poke
A Board of Trade inquiry later finds that Cadco is a pig in a poke. The deals are complex, labyrinthine and interlocking. They involve transactions between companies in Switzerland, Italy Liechtenstein, Curacao and various other offshore tax havens. Company accounts have been fiddled, enormous sums have left the UK in traveller’s cheques, sometimes large suitcases of counterfeit dollars are involved.
A concoction of dishonesty, deceit, crime, gullibility and incompetence
The local MP back in Scotland, Willie Hamilton, calls Loraine “a treacherous, lecherous character of the worst possible type”. Hamilton also finds the Board of Trade inspectors’ report “a most squalid and fascinating piece of reading, certainly that I have read for a very long time. From the first page to the last it is a concoction of dishonesty, deceit, crime, gullibility and incompetence the like of which has probably never been known in Scotland before.”
The lack of expertise in the building projects alone should have rung alarm bells in the local authorities and development agencies. For example, the piggeries in Fife, costing £277,000 (well over £55 million in today’s money), were supposedly designed to handle the effluent from 20,000 pigs – the target number in the project, and equivalent to the sewage from a large town. Yet it was all supposed to go down to a modest sewage tank via a single nine-inch pipe.
But for all the filthy stench of the Cadco debacle, it was already being overshadowed by the Profumo Affair from the year before. Yet even though Cadco involved massive sums and a gargantuan fraud of state organisations, banks and individual investors, no-one was ever prosecuted in the UK courts.
Historians speculate that people in very high places were ensnared in the affair, such as future PM Edward Heath (who happened to be president of the Board of Trade when it began to investigate the scandal), and film stars including Jayne Mansfield and Charlie Chaplin.
Novelist Graham Greene was also among the clients and investors stung by Loraine and his lawyer pal Thomas Roe. As for George Sanders, the “Cad” bit of the Cadco name came from his 1960 autobiography Memoirs of a Professional Cad, and Sanders may have been both co-conspirator and victim, along with his wife, fellow movie star Benita Hume.
* * *
By the mid 1960s Margaret Elliot had lost most of the family fortune in her dodgy ventures and lavish lifestyle. Her shares in Airfix were long gone, she’d left England for good and taken up oil painting. She died in July 2002, and that’s about all I know of her.
I haven’t come across any photos of her, so I don’t even a clue about what she looks like. As for Dennis Loraine, his son Clive Kristen has written an eBook with a naughty title – and with Loraine’s mugshot on its front cover (if eBooks can be said to have covers), though I’ve used an artistic impression of Biggles for this blog post.
From the bits that I’ve read, Loraine comes across not as a lovable rogue and chancer, along the lines, say, of Del Boy Trotter in Only Fools of Horses. Nor a beguiling scoundrel either, like Rick Pym in John le Carré’s magnificent novel A Perfect Spy (and brilliantly played by Ray McAnally in the BBC adaptation). Dennis Loraine seems to be a thoroughly nasty piece of work, a selfish, amoral snake. Yet he must clearly have been a highly effective charmer too.
Noel Coward threatened to write a book about the affair called “The Great Sausage Scandal”, though nothing came of it. And Willie Hamilton, the Labour MP from Fife, told parliament at the time that a film ought to be made of “the whole sordid story”.
Please let me know if there ever was such a film or TV drama. If there wasn’t, it’s still crying out for one. Or are there any documentaries or news clips about the affair out there? Just don’t badger me about Airfix collectibles, OK?