- Paul Merrell, 43, built up 2,000 customers and £450,000 into PayPal account
- School council at Elmfield Rudolf Steiner School pleaded judge to spare him jail
The headteacher of a private school has been jailed for running an illegal online streaming business which ripped off the likes of Sky and BT.
Paul Merrell, 43, pocketed £240,000 over four years from selling software for £10 a month providing illegal access to subscription-only services.
The married father-of-one had been ‘tempted by the extra money’ as he built up a base of around 2,000 customers and around £450,000 in a PayPal account.
Of that amount £200,000 was moved into criminal online enterprises which hosted the illegal streams.
Merrell took a pay cut to earn £56,000 a year as headteacher of Elmfield Rudolf Steiner School, in Stourbridge, West Midlands, where pupils are charged up to £3,311 a term.
A judge jailed him for 12 months despite the school’s council pleading to spare him prison saying it would put the school at risk of closure if he was sent behind bars, Birmingham Crown Court heard.
Merrell had been a deputy headteacher at a school in Coventry for most of the period between January 2017 and January 2021 before moving on to Elmfield Rudolf Steiner School.
He was credited with turning around the financial fortunes of the Black Country-based boarding school.
Merrell, of Boldmere Road, Sutton Coldfield, admitted two offences under the Copyright, Designs and Patents Act.
On Friday he was jailed for a year and a confiscation order was made for £91,250, which was likely to result in him losing his house, his barrister said.
Judge Simon Drew KC recognised Merrell had suffered a ‘great fall from grace’ but concluded a deterrent punishment needed to be passed for what he described as a ‘sophisticated and persistent commercial undertaking’.
Merrell sold software for £10-a-month providing illegal access to subscription-only services including BT and Sky, which typically charged £50 to £60 a month, the court heard.
Over the four-year period he received around £450,000 into a PayPal account but transferred nearly £200,00 of that to criminal online enterprises which hosted the illegal streams.
It was calculated Merrell himself benefited to the tune of £240,705.
Ben Mills, prosecuting on behalf of Birmingham City Council, said: ‘Is it victimless? Without any thought it’s just Sky and BT who lose out and they make millions anyway.
‘Plainly they suffer losses through criminal activity. All their direct subscribers are indirect victims because if there are fewer subscribers they are going to face higher costs.’
Mr Mill said the more ‘visceral loss’ was to the likes of non-profit organisations like The Football Association which received money from selling broadcasting rights to televised matches and distributed the proceeds to grassroots football throughout the country.
Mr Mills added: ‘It was blindingly obvious he knew what he was doing was likely to be criminal. The driving motivation was profit in this case.’
Lee Marklew, defending, told the court that Merrell left his £70,000-a-year job at a school in Coventry in July 2021 and took a pay cut for a £56,000 salary at Elmfield because ‘he knew the school needed saving and he thought he could do something about it’.
He said the fee-paying school had been making six-figure losses for up to 20 years and only managed to ‘stay afloat’ by selling land, which it had run out of when he joined.
The barrister told the court Merrell convinced staff to take a voluntarily pay cut despite the fact they were already earning below the market rate.
He also made further changes to save money including conducting more lessons outside and teaching English himself.
Mr Marklew said the defendant secured an arrangement to take on home-school children who needed extra support, with Dudley Council providing £30,000-worth of funding per pupil per year.
A letter from Sue Dawson, chair of the school council, urged to spare Merrell from jail as ‘all will be lost’ at the school and it would be put at risk of closure.
Mr Marklew added: ‘They don’t pay staff market salaries and accruing someone like Mr Merrell on the salary he commands would be almost impossible to find without a significant degree of good fortune.’
Mr Marklew said Merrell had gone through some family difficulties and was ‘tempted by the extra money’.
He described him as ‘not poor but not wealthy’ and told the judge: ‘Should you send him to prison it is difficult to see how he could keep his house. It’s worth half-a-million.
‘The consequences of his actions upon others, his wife, son and all the pupils and staff would be destabilising in the extreme. They are innocents.
‘The school faced near-intolerable financial strain. He became instrumental in seeing the school through troubled waters. Plainly away from this criminality he is ordinarily a decent human being committed to the school.’
Judge Drew estimated Merrell had diverted up to £3million away from television subscription companies, based on the discount he provided, although he acknowledged not everyone who bought illegal streaming packages would have purchased a legitimate one.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
