← Business Movers
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- [00:00]
Richard Branson
Want to get more from business movers? Subscribe to Wondery for early access to new episodes, ad free listening and exclusive content you can't find anywhere else.
- [00:09]
Lindsey Graham
Join Wondery in the Wondery app or on Apple podcasts. It's late May 1971, at a warehouse in London, England. 20 year old Richard Branson stands in a corner with his arms crossed, watching as officers from the United Kingdom's customs agency methodically search the warehouse. Every vinyl record on the shelves is scrutinized, turned over and checked. Richard keeps his face neutral, but his pulse is hammering. Excuse me. What exactly is it you're looking for? Records marked for export, Mr. Branson. We have reason to believe you've been selling them in the UK to avoid paying sales tax. That's. That's ridiculous. Richard acts surprised, but in reality, he's been doing exactly what the customs officials suspects him of. Last night, though, Richard got a tip off that his business was about to be raided and he cleared the shelves of contraband before the officers arrived. The customs agent glances at his clipboard. According to our records here, you cleared customs at the Port of Dover at 3:51pm yesterday with a van full of records. That sounds right. And you were traveling on to Belgium. Yes. You made good time getting back so soon. Well, I just drive there, unload the van and head straight back. No time for sightseeing, really. You must have been driving through the night from the looks of you. Richard forces a shrug. His clothes are grimy and he has bags under his eyes after spending the night clearing the warehouse. It's a tiring trip. So not. Not to rush you, but do you know how much longer you're going to be? We should be done soon. Good. Because honestly, I could use some sleep. Richard offers an easy smile, feeling a swell of confidence. Looks like he may get away with it. Excuse me for a moment. The customs officer gets a call over the radio and steps away to answer it. Richard shifts his weight, forcing him to stay relaxed. Then he notices the officer's posture stiffen and his head tilts slightly. He turns back to Richard, only now he's the one with a smile on his face. Well, seems like your little cleanup job wasn't quite as thorough as you might have thought, Mr. Branson. I'm sorry, what? Let's not play games. My colleagues are at your shop on Oxford Street. Figured you'd hide them over there, did you? Richard's stomach drops. His mind races for a way out, an excuse, anything. But before he can speak, cold metal snaps around his wrists. You'll be coming with us. I'm arresting you under section 301 of the Customs and Excise act of 1952. Tax evasion. In case you're unfamiliar, Richard Branson knew what he'd been doing was against the rules. He'd evaded tax on three shipments of vinyl records by falsely declaring they're going to be exported overseas. And Richard had seen himself as a savvy businessman exploiting a loophole in the law. But now, as two customs officers led him firmly toward their parked car, Richard realized what he really was. A criminal.
- [03:25]
Tom Newman
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- [03:44]
Lindsey Graham
Can I get you a refill?
- [03:45]
Tom Newman
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- [03:58]
Richard Branson
Here is a true story. A few years ago, I needed to scale up my podcast production business. We were getting busy and I needed to find a sharp, reliable audio editor. So I went to Upwork and quickly found a freelancer who was not only good, but above and beyond good. You'll hear their name in the credits of this episode, even because their work deserves to be called out. So I know with Upwork you can find specialized freelancers in marketing, development, design, podcast editing. Who knows? Experts who are ready to help you take your business to the next level. And posting my job on upwork was easy with no cost. Just register, then browse freelancer profiles, get help drafting a job post, maybe even book a consultation. From there, find, connect and hire freelance.
- [04:39]
Lindsey Graham
Upwork makes the entire process easier, simpler.
- [04:42]
Richard Branson
And more affordable with industry low fees. So post a job today and hire tomorrow. With Upwork, visit Upwork.com right now and post your job for free. That's Upwork.com to post your job for free and connect. With top talent ready to help your business grow up. W o r k.com upwork.com.
- [05:06]
Lindsey Graham
From wondering I'm Lindsey Graham and this is Business Members. At the start of the 1970s, Richard Branson seemed to be on the fast track to business success. Although he'd left school with barely any qualifications, Richard had launched a magazine that captured the imagination of Britain's youth. And he had founded the Student Advisory center, an organization that helped young people access contraception and mental health resources. But Richard had realized that magazine publishing and sexual health counseling were not going to make him rich. So he expanded his business into a new industry. Music spoke to his magazine's readers like nothing else. And Richard decided to capitalize on their interest by selling records through the mail under a new brand name, Virgin. Richard had set up his first company while he was still just a teenager. Now he was 20. And Richard thought of himself as a rising star. A businessman who knew how to take risks to get ahead. But there was a thin line between being bold and being arrogant. Richard's rebellious streak had gotten him into trouble. Before Flyers advertising, the Student Advisory center had run afoul of Britain's censorship and obscenity laws. And Richard was taken before a judge and fined for distributing them. But this experience only strengthened Richard's belief that even if he broke the rules, he'd get away with it. So when Richard dreamt up a scheme that he thought would speed his journey to business success, his overconfidence led him to jump on the opportunity. But Richard was about to learn the hard way. Eventually, there are consequences for breaking the rules. This is the second episode in our four part series on the origins of the Virgin empire. E for export. It's January 1971 on Oxford street, one of the busiest shopping districts in London. Four months before Richard Branson's visit from custom authorities. Richard yanks open the door to W.H. smith and waves his business partner Nick Powell in first. WH Smith is one of the UK's largest retail chains, selling newspapers, books, gifts and stationery. But today, Richard is here with Nick to check out their records. Richard and Nick have been best friends since childhood. They're also the co founders of mail order record business, Virgin Records. The company got off to a strong start thanks to the ads Richard placed in his own magazine. But a few weeks ago, sales came to a sudden halt. British Mail workers went on strike, so Richard's customers can't place orders and he can't deliver them either. So he needs to find another way to sell records. Richard and Nick head downstairs to find their way to the store's music department. It's a drab space with a fraying carpet lit by buzzing fluorescent lights. Richard looks unimpressed. Well, this is depressing. Who wants to buy a record here? There's no, no differentiation, nothing showing what's hot right now. Like what's going to be number one this week? That's the new George Harrison single. Okay, but where is it? Richard looks around. He can't see the George Harrison record on display anywhere. Nick nods at Iraq. Looks like everything's organized alphabetically. Try looking under H. Maybe G. I came in here to buy the new Doors album last year. It took me forever to find it. They put it under T for the Doors. Richard moves to the rack labeled H. Here it is, tucked away next to Isaac Hayes and Hedgehog pieces. Why isn't it front and center? It's like every record is the same. Richard continues flipping through albums. Eddie Holman, Richie Havens, Hawkland. This came out just last week. They buried it like it's a relic. Richard puts the records back and looks around. I mean, they got a good selection, but it's hiding down here. It's also so joyless, don't you think? I'm pretty sure we could do better. Oh, Richard, don't. Don't what? Don't say what you're about to say. You're going to say we're going to open our own record shop? Well, I mean, since you brought it up. Richard, we are not ready for that. Oh, come on. Don't you think we can do better than this? Yes, but it's a whole different game from mail order. We sell records at a discount. That's our brand. That's our selling proposition. But I don't see how we do.
- [09:34]
Richard Branson
That if we have to pay rent.
- [09:35]
Lindsey Graham
On a shop as well as a warehouse. Yeah, well, how many records did we sell at a discount last week?
- [09:41]
Richard Branson
None.
- [09:41]
Lindsey Graham
And the week before that?
- [09:43]
Richard Branson
None.
- [09:43]
Lindsey Graham
It's the postal strike, you know that. And how much longer is that going to last? I don't know. I'm not negotiating with the unions. Okay, a different question. How long do you think we can keep trading with zero income? I mean, we got to do something. And this looks like an opportunity. An opportunity to do what? Lose more money? I'd rather lose more money than lose the entire business. The real risk here is that Virgin Records is going under. If this strike goes on for much longer, I don't think we'll have a business left at the end of it. What do you want to do? Nothing. Just wait until the world is more convenient. NICK SIGHS what? So we're agreed?
- [10:19]
Richard Branson
No.
- [10:20]
Lindsey Graham
But I guess we're going to go find ourselves a shop to rent all the same. Richard Branson and Nick Powell spent the rest of that morning walking the length of Oxford street to see where the.
- [10:30]
Richard Branson
Foot traffic was heaviest.
- [10:32]
Lindsey Graham
They homed in on the east end of the street and started hunting for a retail space they could afford. That wasn't easy in central London, but Richard stayed focused because the alternative was going out of business. Although Richard Branson was still in the early stages of his career, he'd already learned a key lesson. There was no harm in asking. No matter how absurd a request might seem. There was rarely a penalty if he got turned down. As a school child, Richard had asked his father to use a field next to his farmhouse to grow Christmas trees. He'd asked for permission to breed parakeets in a disused barn, and both times his father had said yes. This strategy paid off again when Richard and Nick Powell found a vacant retail space on Oxford Street. It was a floor above a run down shoe store, but Richard knew he wasn't in a position to rent a prime piece of real estate, so it would have to do. Richard and Nick entered the shoe store and asked to speak to the owner. Then Richard explained that they were interested in opening a record shop on the vacant second floor. The owner looked doubtfully at the two scruffy 20 year olds and asked how much rent they were offering. Richard came clean. They couldn't afford to pay anything, at least not yet. But they promised they'd attract plenty of customers to the store. And a lot of the young people who came in to buy records would surely be tempted to pick up a new pair of shoes on their way out too. Richard's pitch worked. The store owner didn't have much to lose. The second floor had been vacant ever since he bought the place, and Richard's offer was better than nothing. So the store owner agreed that as long as no other paying tenant turned up in the meantime, Virgin Records could occupy the space for free until they could afford the rent. Richard eagerly shook hands on the deal, confident that Virgin Records would make enough money to pay the rent much sooner than the store owner anticipated. Then, over the next five days, Richard and Nick worked non stop to get their new Virgin record store ready. They knew what they wanted to create, and it was very different from existing retailers like WH Smith. Richard and Nick wanted their store to be more than just a place to buy records. They wanted it to be a place where music fans could congregate, make new friends and talk about the latest records by their favorite bands. To encourage customers to stay for longer, Richard and Nick furnished their store with couches, beanbags and cushions. They installed a coffee machine which dispensed free drinks. They had copies of music magazines for customers to read. And they set up record players with headphones so several people could listen to different records all at the same time. And when they weren't busy hauling furniture or painting walls, Richard and Nick handed out hundreds of leaflets along Oxford street promoting the arrival of their new store. All their efforts paid off. At 9am on opening day, the shoe store's owner unlocked the doors to the building and was astonished to find a line of teenagers stretching a hundred yards down the street. They flooded inside, climbed a rickety flight of stairs to the second floor and eagerly began browsing Virgin Records selection of discounted albums. Since the Virgin store didn't have to pay rent and Richard already had a warehouse full of stock, initial costs were low. Richard's expenses were mostly limited to keeping the free coffee machine topped up. But that small outlay had a big payoff. The longer shoppers stayed in the store, the more they spent. Many customers left Virgin Records with not just one new purchase, but a pile of them. And the additional records were often recommendations from fellow music lovers they'd met in the shop. It was as if every customer was a salesman. Within weeks, the store on Oxford street had established a reputation reputation as one of London's hottest new retailers. And when the postal workers strike finally ended and Virgin's mail order operation could resume, Richard and Nick's company suddenly had two thriving revenue streams. But there wasn't as much profit in the music business as Richard had once thought. The retailer that actually sold the record only got a small slice of the sticker price. A portion went back to the artist in royalties, but by far the biggest.
- [14:31]
Richard Branson
Share went to the label that produced.
- [14:33]
Lindsey Graham
And published the music. And as he dug more into the figures, Richard realized that was the best way to make money in the music business. And he wanted a piece of the action. But he knew that the music industry was already packed with established record labels. Setting up in direct competition with them.
- [14:50]
Richard Branson
Wasn'T likely to end well. So just as he had with Virgin.
- [14:53]
Lindsey Graham
Records brick and mortar store, Richard looked for a way that his record label could do things differently. Richard started with market research. By now, Student magazine had been operating for over three years. It had published interviews with some of the biggest names on the British music scene, including the Rolling Stones singer Mick Jagger and the former Beatle John Lennon. It had also run a regular feature on up and coming bands hoping to hit the big time. Richard got on the phone and called as many of these artists as possible, asking them for their thoughts on the music business and what they looked for in a record label label. There was one thing that both established and new bands complained about recording studios. The studios used by the big labels weren't always great places to work. They were often overbooked, meaning that artists were only given narrow windows to record their music. And bands were forced to bring in all their own equipment with them on the day and take it out with them when they left, making recording even more of a hassle. Richard realized that this was his opening. He could offer something different, a record label that focused on a better experience for the artists. They didn't want to be up against the clock. They wanted time and space to let their creativity flow. And Richard thought he could offer that. Virgin Records had already found success with its record store by creating a comfortable, informal environment where music lovers felt at home. Now Richard saw an opportunity to do the same for bands and artists. But his vision for a new kind of record recording studio wouldn't just be another way for Richard to make money. It would be the first step toward turning Virgin Records into a music empire.
- [16:29]
Unknown
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- [17:12]
Richard Branson
It's easy to be curious and even a little frightened by the fast pace of change in today's tech world. More and more is shaping not just business, but society, culture and politics. So I think it's a good idea to know what today's top tech leaders are thinking and where they plan to go. Tech Unheard is a podcast series that lets you listen in on one on one conversations with industry leaders as they discuss everything from the potential of artificial general intelligence to getting nervous before a big keynote like this. Clip from a conversation with Chris Miller from the American Enterprise Institute.
- [17:43]
Unknown
I could never have predicted just the speed at which both innovation has happened, but also a recognition that you can pretty quickly turn this innovation into real products. The fact that all of the world's big tech companies are now rapidly increasing their spending on data centers, which means on semiconductors, that's been the surprise.
- [18:01]
Richard Branson
Get in the room with Some of Tech's biggest leaders tune in to tech unheard from ARM&NPM wherever you get your.
- [18:07]
Lindsey Graham
Podcasts foreign it's early April 1971 in rural England, two months after the opening of the first Virgin record store. Richard Branson speeds along a narrow road winding through the Oxfordshire countryside. It's a bright spring day and the fields whizzing past on either side of the car are lush and green. Beside him in the passenger seat is Tom Newman, a recent addition to the payroll at Virgin Records. Tom is a 27 year old musician with a few records of his own under his belt, but he's always been more interested in the business side of the industry and he's been helping Richard.
- [18:53]
Richard Branson
Hunt for the right space to set.
- [18:54]
Lindsey Graham
Up his new studio. Richard slows down as he enters the small village of Shipton on Cherwell and peers through the windshield at the road ahead. They said it was just past a pub called the Boat Inn. This must be it. Richard turns off the road and onto a gravel driveway. Through the trees, a grand house slowly comes into view, its limestone walls glowing golden in the afternoon sun. Tom gets out of the car first. You know, when we're done here, I think I'm going to take the train back. What's wrong with my car? That's not the car. You take corners like a race car driver. I feel ill. Richard grins. Well, you survived. And just look at this place. Yeah, it's huge. How long did you say it's been on the market? The agent didn't want to say, which I guess means a long time. Well, there's probably not that many buyers interested in a 15 bedroom house in the middle of nowhere. Where is he anyway? Richard shrugs. There's no sign of the real estate agent anywhere. He must be running late. Let's. Let's look around. Can we do that? I don't see why not. Richard and Tom set off on a loop around the house as Richard reads from the realtor's brochure. It says here that Shipton Manor was built 300 years ago, was once a home to William Turner, the painter. Yeah, there's art in its bones. In total, it's over 9,000 square feet, includes several outbuildings as well as 72 acres of gardens and woodland. I'm thinking we can have the recording equipment in the old stables over there. Artists can stay in the main house, the kitchens, bathrooms, everything they'll need. Tom rubs the dirt from a window, peers inside. Oh, it's a real mess. Look at that wallpaper. You know It's a fixer upper. We can handle that. What's the asking price? 35,000. But if it's been on the market that long, I bet we could get them down to 30 for a quick sale. Tom steps back and glances around. I still don't see what's wrong with London. Every other label is based there, but that's it exactly. We have to be something different. A band's gonna book our studio because they know they're not just getting a recording space. It's a residency. They can come here and stay for weeks, months, if they want. There's nothing to do out here, though. And that's also precisely it.
- [21:05]
Richard Branson
No distractions, no groupies, no clubs.
- [21:08]
Lindsey Graham
They can jam, brainstorm, throw ideas at the wall and see what sticks. They could go on long walks in the countryside, get the creative juices flowing. They can request Cord whenever it suits him. Whenever inspiration strikes, Richard gestures all around. See? This manor is going to be the birthplace of stars. When the real estate agent finally showed up, he confirmed that the owner was eager to sell and would be willing to drop the asking price to £30,000 for a quick deal. But at over $550,000 today, it was still a hefty price tag for Richard Branson. But he had a clear vision for his new recording studio, and this was the perfect location. Now he just had to come up with the cash to make it a reality. By the spring of 1971, Richard Branson had been in business for more than three years. But he'd never taken out a bank loan. In that, Time Student magazine and the Student Advisory center had made so little money that no bank was ever interested. But now his Virgin Records retail business was booming. Richard could prove to the banks that he could afford to pay back a loan. So with his company's books under his arm, Richard went to his bank and asked for a mortgage to buy Shipton Manor. The bank approved his request, but there was a catch. Since Virgin Records had only been recently profitable, the bank would only lend him £20,000. If he wanted to buy the property in Oxfordshire, Richard would have to come up with the other £10,000 from somewhere else. Richard found he had no option but ask his family for their support once again. This time, it was his Aunt Joyce who helped.
- [22:44]
Richard Branson
She agreed to refinance her house to.
- [22:46]
Lindsey Graham
Raise the money Richard needed.
- [22:48]
Richard Branson
She insisted that he pay her back.
- [22:50]
Lindsey Graham
Only when he was able to. Richard was grateful, but his aunt's generosity also added to the pressure on his young shoulders. Now, if his business failed, Richard might Take Aunt Joyce down with him. After the purchase went through, Richard and Tom Newman began work on converting a 17th century mansion into a 20th century recording studio. To save money, they decided to carry out the work themselves. They pulled up linoleum to reveal the original stone flooring and cleaned and repainted every room. Once the main house was habitable again, they planned to transform one of its outbuildings to into a recording studio by soundproofing the walls and installing a grand piano, a mixing desk and state of the art recording equipment. But it was a slow process. Richard was needed in London most of the time still running Student magazine, and he had to process Virgin Mail orders and help out in the Oxford street store as well. That left only the weekends to work on the recording studio. Richard began to worry that he'd taken on more than he could manage. Revenue from from the Oxford street store was rising, but so were the costs. It now employed several staff who had to be paid, as did the bills for electricity and water. Then, when the mortgage payments for Shipton Manor were added on top, Virgin Records was ending each month in the red. But Richard was convinced that the new recording studio would eventually boost revenue when it was finished. Until the studio was ready to receive bookings though, all he could do do was cut costs. So Richard became single minded in his determination to save money wherever he could. And in his desperation, he stumbled across a cost saving measure that was as effective as it was illegal. In late spring 1971, Virgin Records received a large order from a retailer in Belgium that wanted to import English language records. Richard then placed an order for the records from his suppliers. But when it arrived, the bill was substantially lower than he expected. He soon learned that because the records were not destined for sale in Britain, they were exempt from a 33% sales tax levied by the UK government. Pleased that his profit margin had significantly increased on this Belgian order, Richard prepared the records for export. But the price quoted by shipping companies was so high that Richard decided to deliver them to Belgium himself. Piling thousands of records into a van, Richard drove to the ferry terminal at Dover on the south coast of England. Once he was across the English Channel, he planned to drive through France to Belgium, then return to Britain. The very next day. Richard got his export paperwork stamped at Dover and boarded the ferry. But when it docked at Calais, French customs officers blocked him from entering the country. He didn't have the paperwork he needed to get his records through France. Richard was annoyed. He had no choice but to turn his van around and board the ferry home. He could get the right permits and return another day. But as he flipped through the paperwork during the return crossing, Richard got an idea. He was now in possession of an official form from the British government stating that the records in his van had been exported abroad. But because the French had blocked entry into their country, Richard still had the records in his possession. As long as custom officers didn't search his vehicle on his return to Dover, no one would know that he still had his merchandise. After the ferry docked in Dover, Richard drove through the port and held his breath as he passed the British customs terminal. But the officers just waved him through. Without a second glance, Richard returned to the Virgin warehouse and put the records in storage. He now had hundreds of records that he could sell as usual in the UK. And since he hadn't paid the 33% tax on them, his profit margin would be significantly increased. With his finances still precarious, this was a welcome boost. And Richard soon wondered if he could repeat the trick. He could order more records from British labels, pretend that he was going to export them, but then secretly sneak them back into the UK and sell them there. Technically, this was tax evasion, but Richard decided that the risk was worth it. As far as he was concerned, he was exploiting a loophole. It wasn't his fault the French turned him away. And he told himself that as soon.
- [27:00]
Richard Branson
As his studio was set up and.
- [27:01]
Lindsey Graham
Making money, he'd go back to the usual way of ordering records and paying the proper tax. But no matter how Richard tried to justify it, the law was clear. Virgin Records was committing tax fraud. But Richard Branson had never had much time for rules or regulations. It was a big part of what had allowed him to get ahead so quickly. And he'd never faced any real consequences for failing to toe the line. Even when he'd been taken to court for publishing obscene literature at the Student Advisory center, the case had ended up boosting his business. Richard had been found guilty, but he'd paid just a token fine and received priceless publicity in return. But all this success had left Richard with the impression that he could do almost anything he wanted. That the rules somehow did not apply to him. But he was about to discover how wrong he was. Business Movers is sponsored by prizepix.
- [27:56]
Richard Branson
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- [28:57]
Lindsey Graham
Prizepix run your game Want to grow.
- [29:00]
Unknown
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- [29:41]
Lindsey Graham
It'S.
- [29:42]
Richard Branson
Just before midnight in late May 1971 on a canal in London, one month.
- [29:47]
Lindsey Graham
After French customs turned back a Virgin record shipment. Richard Branson smokes a cigarette on the deck of a small houseboat, listening to the water lap gently against the side of the canal. He's been living here for a few months, and the novelty of it hasn't worn off. Despite being in the part of London, the canal is always quiet. Richard likes the illusion of being apart from the rest of the city. It helps him wind down after a long day. And it's certainly been that today. For the third time in a matter of weeks, Richard was up early to drive down to Dover with a van full of records before bringing them back to London and stashing them in his warehouse. The sudden sound of a ringing phone interrupts his thoughts. Richard stubs out his cigarette and steps inside, the deck creaking under his weight. Yeah? Hello? Richard Branson? That's me. Who's calling? They're on to you. I'm sorry, you're gonna be raided first thing in the morning. Raided for what? I think you know. Come on you didn't even bother to drive onto the ferry after getting your paperwork stamped. That kind of thing gets noticed. Richard grips the receiver. It's true. He was in a hurry earlier, and sailing to Calais and back seemed like a waste of time. So once he got the paperwork stamped by customs officers in Dover, he simply left the port without getting on the ferry to France? I didn't think anyone would really notice. You think you're the first person who's tried this trick? Custom officials aren't all idiots, you know. Look, I don't know who you are, but even if someone can prove I didn't get on the ferry, who's to say I've been selling the records here? Maybe I was sick and I didn't feel like taking the boat. You know, all the records looked the same as any other. Are you sure about that? Get yourself an ultraviolet lamp. A sun lamp. Shine it on the records you brought back from Dover and you'll see there's a fluorescent letter E stamped on every one. An E for export only. It means you can't sell them in this country. Richard goes pale. The cramped interior of his houseboat suddenly feels even smaller. I. I didn't know that. Well, if they raid you, they'll spot it straight away. God, what do I do? I would get rid of him now. Yeah. If I were you, I'd hurry. The raid's gonna be at dawn or soon after. That gives you what? Five hours? Five hours? Why are you telling me this? Why are you helping me? You run the student advisory center, right? Yeah. Well, that place helped. A friend of mine once. Talked him out of doing something stupid. Call this returning the favor. After the anonymous caller hung up, Richard Branson stood in his houseboat for a moment, just staring at the phone in his hand. He didn't know whether this information was genuine, but he did know he had a warehouse full of hundreds of contraband records. And if custom agents raided it the next morning, Richard would be caught red handed. The hours that followed the mystery phone call were some of the busiest of Richard Branson's life. He knew it was possible the call was just an elaborate prank, but this was one risk he was not willing to take. So he drove to an all night drugstore and bought an ultraviolet sun lamp. Then he went to his warehouse and shined the light on the records. Sure enough, there on the COVID of every one Richard had pretended to export, was a luminous, iridescent E that sealed it. The anonymous caller was telling the truth. Richard had a warehouse full of incriminating Evidence, and the authorities were about to knock on his door. Richard immediately called his business partner, Nick Powell, and together they used the UV lamp to identify all the contraband in the warehouse and loaded the records into Richard's van. Working through the night, they transported them to the Virgin store on Oxford street, where they swapped the export only records with clean records from the racks. Then they returned with these to the warehouse. Now there was only legitimate stock in the warehouse. While the contraband was in the store. They finished their efforts just as the sun was peeking above the horizon. And soon after, as predicted, customs officers showed up at the warehouse with a warrant to search the place for illegal goods. Richard tried to act surprised and innocent. He invited the officers in and told them to take as long as they liked. He had nothing to hide. The customs officers then conducted a methodical search of the warehouse. They shined ultraviolet lights on every record, on every shelf, and when they failed to find any incriminating e stamps, they seemed surprised and even disappointed. Richard breathed a quiet sigh of relief. It was a close call, but it seemed he had gotten away with it until one of the officers received a message over the radio. Richard had miscalculated. He'd assumed that the authorities would only check the warehouse, but they had records showing that Richard had apparently made several trips from Dover to Calais over the past month. And customs officials had guessed that some of the merchandise from those earlier trips would be on the racks of the Virgin records store by now. So at the same time that the warehouse was being searched, customs officers had also raided the Oxford street store. There they found hundreds of records that were marked with a telltale letter E. Richard was immediately arrested for tax evasion and taken into custody. During a police interview, he was told there was a clear trail of evidence against it. The police had his ferry tickets, the paperwork he'd signed at the border, and the contraband records from the store. Soon they had Richard's confession as well. Richard admitted he pulled off the scam three times. Investigators who examined the Virgin books concluded that he'd avoided paying around 12,000 pounds in taxes as a result. Today, that'd be worth more than $200,000. After hours of questioning, Richard spent the night in jail. But even though he'd been awake for more than 24 hours, he still found it difficult to sleep. During his first brush with the law, Richard Branson had been eager to fight what he considered to be the unfair prosecution of the Student Advisory Center. But Richard knew he couldn't justify his actions this time. He'd been caught red handed.
- [35:46]
Richard Branson
So as he lay in the darkness.
- [35:47]
Lindsey Graham
Of a jail cell, Richard imagined every possible outcome. At best, he'd have to pay back all the money he cheated out of the government. At worst, he would lose everything he built. The store, the studio, the magazine, and Richard himself could be going to prison From Wondering this is episode two on our four part series on Richard Branson and the birth of Virgin for Business winners. On the next episode, while Richard Branson struggles to deal with the consequences of his arrest, Virgin expands its reach with the help of a breakout hit and a notorious punk rock band. If you like business movers, you can.
- [36:27]
Richard Branson
Unlock exclusive episodes found nowhere else on Wondery and access new episodes early and ad free. Join Wondery in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. And before you go, tell us about yourself by filling out a survey@wondery.com survey.
- [36:47]
Lindsey Graham
If you'd like to learn more about the early days of Virgin, we recommend Losing My Virginity by Richard Branson Virgin King Inside Richard Branson's Business Empire by Tim Jackson and Amal Rajan Interviews Richard Branson Produced by the BBC A quick note about our dramatizations in most cases we can't know everything that happened, but all our reenactments are based on historical research. Business Movers has hosted, edited and executive producer produced by me, Lindsey Graham for Air Show Audio editing by Mohamed Shazib sound design by Molly Bach. Our supervising sound designer is Matthew Filler. Music by Thrum. This episode is written and researched by Emma Dibga, Senior producer Scott Reeves. Executive producers are William Simpson for airship and Aaron O'Flaherty, Jenny Lauer Beckman and Marshall Louie for wondering.
- [37:37]
Richard Branson
In 1976, a Georgia native, Navy veteran and peanut farmer named Jimmy Carter won his bid for the presidency. What Carter didn't know then was that the next four years would be the most difficult he could ever imagine. Hi, I'm Lindsey Graham, the host of Wondery's podcast, American Historytellers. We take you to the events, times and people that shaped America and Americans, our values, our struggles and our dreams. In our latest series, we explore Jimmy Carter's time in the White House, from his unexpected presidential victory as an outsider vowing to clean up Washington to his remarkable diplomatic breakthroughs and legislative accomplishments on energy, education and the environment. But Carter also faced crushing challenges as.
- [38:16]
Lindsey Graham
He worked to lead the country through.
- [38:18]
Richard Branson
Energy shortages, sky high inflation and the Iran hostage crisis. Follow American Historytellers on the Wondery app or wherever you get your podcasts. Experience all episodes ad free and be the first to binge the newest season only on Wondery.
- [38:31]
Lindsey Graham
Join Wondery in the Wondery app, Apple Podcasts or Spotify.
- [38:35]
Richard Branson
Start your free trial today.