'I didn't think I was doing anything wrong, but when I look back now, I was incredibly stupid'

A Lancashire prison governor accused of corruption tearfully told a court she had been “incredibly stupid” but denied doing anything wrong.

Divorcee Kerri Pegg, 42, is alleged to have begun a relationship with convicted drug dealer Anthony Saunderson, who was known to criminal associates as “Jesse Pinkman”, after the meth dealer from the TV show Breaking Bad. Wiping away tears as she stood in the witness box giving evidence in her own defence, Pegg told the jury at Preston Crown Court: “I didn’t think I was doing anything wrong, but when I look back now, I was incredibly stupid.”

It is alleged Pegg was gifted a £12,000 car from Saunderson after she had approved his temporary release from HMP Kirkham, where she was a governor. Police seized the Mercedes C class saloon, allegedly paid for by Saunderson in drugs, outside her home when police swooped in November 2019.

Inside her apartment in Orrell, Wigan, they found designer clothes, shoes, handbags and jewellery – along with size 10 Hugo Boss flip flops and a toothbrush, both carrying traces of Saunderson’s DNA. Pegg was seen as a “rising star” in the Prison Service, quickly climbing the career ladder from graduate entrant to prison governor in six years, the jury has heard.

Described in court as, “petite, blonde and bubbly” Pegg, who also had breast enhancement surgery, told the court she suffered “professional jealousy” while at HMP Kirkham. The court heard Saunderson was given a 10-year jail term in November 2014 for drugs conspiracy and money laundering.

In June 2017, he was moved to HMP Kirkham, an open prison, where prisoners are prepared for release through regular temporary time out of custody for education or work visits. In 2018, Pegg joined the prison as a governor and allegedly broke the rules by signing off on Saunderson’s temporary release, without proper authority, which she denies.

Saunderson served his sentence and was released from Kirkham on May 22 2019. But two months later he became involved in another conspiracy to supply drugs, identified as the boss of a drug gang and went by the name of Jesse Pinkman.

At the same time, in July 2019, the court heard Pegg created a contact in her phone for Saunderson, she said because he had been contracted by some prisons to go inside and run a project, titled BADD, Breaking Alcohol and Drug Dependency. Pegg said at the time she was the regional official co-ordinating drug strategy in six prisons in the North West of England and as Saunderson and another man was contracted and paid to deliver the service, she was still in contact with him.

Pegg added: “I was giving some assistance and advice, discussing their career aspirations.” Later, Pegg said in October 2020, “out of the blue” she got a phone call at work from Saunderson.

She said: “He was feeling quite low and wanted a friendly ear, someone to talk to. I worked with him as a colleague. I did not see a problem with that. I thought he would be returning to the BADD programme after lockdown.

“He asked if I had an alternative number. He said his wife was a very jealous woman. Did not like him having contact with any woman.

“I just thought I was doing the right thing. I bought a cheap Nokia phone and sim card. The phone was for him to use as a support mechanism.”

Andrew Alty, defending, said: “He was an ex-prisoner. You have acquired a phone, called a burner phone, to allow him to communicate with you outside the prison. Did you report this?”

Pegg replied: “No. I still viewed him as a colleague. I still viewed him as coming back to work.

“I didn’t think I was doing anything wrong, but when I look back now, I was incredibly stupid. I look back now and think, ‘Why did I do that?’”

Pegg said she did not know how Saunderson’s DNA got on the flip flops found in her flat. She said his DNA may have got on the toothbrush from her flat because at the time she wore braces and was having dental treatment so had to brush her teeth regularly after meals.

Pegg said she carried toothbrushes with her all the time and the DNA transfer may have come from contact with her in prison. After Saunderson was released from jail, he began using an Encrochat encrypted mobile phone, used by serious, organised criminals to send messages and secretly communicate, the court heard.

When the system was cracked by law enforcement agencies it showed Saunderson was involved in massive drug trafficking. He has since been convicted for those offences. Other messages on the phone also revealed the “ongoing nature” of his relationship with Pegg, it is alleged.

Pegg denies two counts of misconduct in a public office, one by having a relationship with Saunderson and the second by failing to disclose county court judgements about her debts, leaving her vulnerable to exploitation. She also denies one count of possessing criminal property, the Mercedes car, from Saunderson.

The trial was adjourned until Thursday morning.

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