Gray, R v [2007] EWCA Crim 2658

[2007] EWCA Crim 2658Case No 200604473 D1 & 200700458 D1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE READING CROWN COURT
HER HONOUR JUDGE ZOE SMITH
T20057266
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 09/11/2007
Before
LORD JUSTICE TUCKEYMR JUSTICE FOSKETTHIS HONOUR JUDGE PATIENCE QC (SITTING AS A JUDGE OF THE COURT OF APPEAL CRIMINAL DIVISION)
Between
RRespondentPHILLIP RONALD GRAYAppellant
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr David Matthew (instructed by the Serious Fraud Office) for RespondentMiss Neena Crinnion (instructed by Irwin Mitchell Solicitors) for AppellantHearing Hearing date : 6/11/07
Judgement
[1]On 18 July 2006 the Appellant/Applicant (to whom for convenience we will refer to hereafter as the Appellant) was convicted on an indictment containing two counts, the first being an allegation of conspiracy to corrupt contrary to section (1) of the Criminal Law Act 1977, the second being an allegation of conspiracy to defraud contrary to common law.[2]The trial took place in the Reading Crown Court before Her Honour Judge Zoe Smith and a jury over a period of ten days. So far as the Appellant was concerned, it represented a retrial, the jury at his first trial having failed to agree. That trial, over which Her Honour Judge Smith also presided, lasted some 53 days. At that trial the four alleged co-conspirators were convicted and sentenced to various terms of imprisonment to which we will refer later.[3]The Appellant was sentenced on 11 August 2006 to three years imprisonment on the first count and four years imprisonment on the second count, those sentences to be concurrent. In other words, the total sentence was one of four years imprisonment.[4]On 27 October 2006 he lodged an application for permission to appeal against conviction to which we will refer in more detail shortly.[5]On 13 December 2006, following a two day hearing before Judge Smith that related also to two other defendants convicted after the first trial, the Appellant was made the subject of a Confiscation Order in the sum of £627,170 with twelve months to pay and a sentence of forty five months imprisonment in default. From that sum £350,000 was to be paid by way of compensation to the victim of the fraud.[6]On 2 February 2007 the Appellant applied for leave to appeal against the Confiscation Order (an application made within time) and an application for leave to appeal against sentence (some four months out of time).[7]On 11 April 2007 the single judge, Silber J, refused the applications for leave to appeal against conviction and sentence, but granted leave to appeal against the Confiscation Order. He directed that the Prosecution should comment on the grounds of appeal put forward on the Appellant’s behalf in relation to the Confiscation Order.[8]The matter thus comes before us as an appeal with leave in relation to the Confiscation Order and by way of renewed applications for leave to appeal against conviction and sentence, an extension of time being sought in respect of the application for leave to appeal against sentence.[9]The other co-accused on the indictment were Barry Simpson, Roger Harper, Anthony Welcher and Georgina Welcher (Mr Welcher’s wife).[10]The general nature of the Prosecution case can be summarised as follows, the summary being based at least in part on the summary given in this court on the hearing of the appeals of certain other Defendants: see R –v- Welcher & others [2007] EWCA Crim 480.[11]The victim of the two alleged conspiracies was Mars UK Ltd (hereafter ‘Mars’), the manufacturer of various products including well known confectionary. It operates a number of plants in the United Kingdom, but its UK headquarters for the confectionary division is on the Slough Trading Estate from which it has traded for many years. There is another Mars factory on the same estate. The production lines are in constant use and often demand maintenance, some of it being planned, but other work being required urgently. Such maintenance, certainly at the material time, was provided in part internally and in part by external contractors. One of the external contractors was a company known as Ironfirm Ltd which traded as Excel Engineering (hereafter ‘Excel’), a company whose premises were also on the Slough Trading Estate not far from the main entrance to Mars.[12]Count 1 alleged that from January 1991 until June 2001 the defendants conspired together that Simpson and Harper should corruptly give, and Gray, Welcher and Mrs Welcher should corruptly accept, or obtain, gifts or consideration, by way of cash, items of value and services, as inducements or rewards for showing favour to Ironfirm Ltd, trading as Excel Engineering (“Excel”), Simpson and Harper in relation to the business of Mars. Count 2 alleged that during the same period the accused conspired together to defraud Mars.[13]Simpson and Harper were the sole directors of Excel, a limited company which specialised in precision engineering work and had been set up by Harper’s father. It had enjoyed a good reputation in the engineering world. In general terms, Simpson was the engineer and Harper the accountant. Welcher and the Appellant were employed by Mars at its premises in Slough, Welcher since 1974 and the Appellant since 1977. The Appellant joined Mars as a mechanical fitter and progressed to taking charge of the maintenance of at least some Mars buildings with responsibility for commissioning maintenance work to be done by outside companies including Excel. Welcher became an engineering technician with responsibility for running the company’s confectionary lines. Welcher also set up a consultancy business, called GW Designs, which he operated from his home with the help of his wife. This company was merely a vehicle for receiving the corrupt payments.[14]The two conspiracies overlapped in the identity of the alleged conspirators, the dates and, to a large extent, the conduct alleged. The essential allegation was that the Appellant and Welcher received bribes from Simpson and Harper in return for placing Mars’ works orders with Excel and authorising excessive or bogus payments from Mars to Excel. The fraud was in the issue of purchase orders, excessive payments for work done and payments for work not done. A stage was reached when bribes were marked as extras on the documentation so that Mars were paying for the sums paid to its own employees as bribes.[15]The Prosecution case was that the bribes paid to some of the corrupt Mars employees were paid in cash. Two former Mars employees (a Mr Soroco and Mr Brench) gave evidence that they had received cash bribes, although they each apparently disputed strongly that the Excel records to which we will refer later recorded accurately what they had received. An Excel employee called Buchanan gave evidence that he had taken cash envelopes to pay Mars employees, although not to the Appellant. There was evidence of frequent long meetings between Simpson and the Appellant as well as some social contact between them (they apparently lived next door to each other for many years), and the Prosecution case was that by inference the Appellant must have been paid directly by Simpson.[16]The Prosecution case was that evidence of the bribes to the Appellant was to be found in certain records, including certain internal records of Excel, when viewed in the light of other circumstantial evidence. This documentary material raised an important issue in the case against the Appellant to which we will return shortly.[17]Each accused was convicted on both counts (the Appellant, as already indicated, on a retrial) with the exception of Mrs Welcher who was convicted on Count 1, but acquitted on Count 2.[18]Simpson, Harper and Mrs Welcher did not seek to challenge their convictions on appeal, but Welcher did. Welcher’s appeal against conviction failed.

The case against the Appellant

[19]We have already referred to the general nature of the prosecution case and the way it was put against the Appellant. There was no direct evidence that he had received any corrupt payments or other inducements to create false documentation. As we have recorded above, the evidence to support the allegation that he did receive bribes was said by the Prosecution to be contained in certain records maintained by Harper and Excel, records that, it was said, were admissible evidence against him for this purpose.[20]The system by which purchase orders within Mars were created before being transmitted to Excel was briefly as follows. When work was required by Mars a purchase order and number were created by someone within Mars who requisitioned the work. When the work was completed Excel would produce an advice note that was sent to Mars for approval. Once the approval was given within Mars and the work to which it related was thus signed off, Excel would prepare an invoice which would be sent to Mars for payment. If, of course, the work reflected in the work requisition was fictitious or the amount charged and then authorised by an employee of Mars was excessive, Excel would receive an unjustified payment. The Prosecution case was that Welcher and the Appellant received bribes to enable this to be done.[21]The Prosecution case was that the bribes became so extensive that the outflow of cash from Excel had to be accounted for by Simpson and Harper within the Excel books and, of course, justified to the company’s auditors, albeit in a disguised form. From the early 1990’s certain employees of Mars, including the Appellant, were recorded in the Excel books as being employees of Excel to whom ‘salesmen’s commissions’ were paid. In some records the actual name of the Mars employee appeared, in others merely initials and, at a later stage in 1994, when a Pegasus computer system was introduced at Excel, ledger codes were ascribed to them. The Appellant’s ledger code, as revealed by some handwritten notes found at Harper’s house after his arrest, was 9030.[22]A further feature to be noted was the introduction within Excel in 1996 of a new series of work order numbers of five digits beginning with 7. This became known as the ‘70,000 series’. It was operated on a separate database from other Excel work and was largely, if not exclusively, under Harper’s control. Harper erased the 70,000 series records from the Excel computer shortly before Excel was sold in June 2001 and so a full picture was never established. However, the evidence suggested that invoices raised within this series related to work apparently carried out for Mars by sub-contractors employed by Excel. In fact those sub-contractors were fictitious and the payments ostensibly recorded as having been paid to them were in fact paid to the corrupt Mars employees.[23]There was evidence to link the Appellant to purchase orders within the 70,000 series in a large number of cases, including to a fictitious firm called Brepole Engineering. In total his name was associated with 105 work order numbers under the 70,000 series and he did not dispute that his signature appeared on many orders or advice notes relating to work ostensibly carried out by those companies.[24]The Prosecution also placed reliance on the fact that during 1997 Welcher was stopped by Mars from doing planned or preventative maintenance and as a result Excel’s genuine work from Mars reduced, as indeed it did through works commissioned by the Appellant at or about the same time. However, notwithstanding that, purchase orders through the 70,000 series continued unabated, a good number of which, as already indicated were signed by the Appellant.

The Appellants’s case

[25]We have recorded in summary form the Proscecution case, both generally and against the Appellant. His case was straightforward: he had not received any payments or gifts from Excel. The work he had commissioned Excel to carry out had been genuine and appropriately charged for. Whilst he conceded it was possible that a very small number fictitious jobs could have been slipped past him, the majority of the work must have been done and done appropriately, including such work as was recorded in the 70,000 series that was connected to his areas of responsibility. His case was that a manager supervised him and that a significant proportion of this work was for managers of other departments paid for out of their own departmental budgets, and that it would not have been possible for him to have been instrumental in overcharging or in the placing of fictitious orders. He said that there was no connection at all between him and the ghost company to which Harper and Simpson had attributed payments to him in the records they kept. By their verdict the jury plainly rejected this.

Renewed application for leave to appeal against conviction

[26]Mr Philip Hackett QC submitted at the trial that the personal records kept by Harper and Simpson, which revealed payments against the Appellant’s name, were inadmissible against him, as were the invoices created by the fictitious companies. He also argued that the sales commission book kept by Simpson and the other accounting records of Excel which showed Mars employees as Excel salesmen were likewise inadmissible.[27]In a ruling given towards the beginning of the trial, the learned

Judge said this:

“It is well established that the acts of one conspirator made in furtherance of the common design may be admitted as part of the evidence, not only of the existence of a conspiracy, but also the participation of persons absent when those acts were made and in my view these notes, ledger entries and the drawing of the cheques by Simpson and Harper were acts in furtherance of the common design, namely to get Mars to pay Excel invoices for the costs it has never incurred and are admissible. Similarly, the sales commission book kept by Mr Simpson and the P35s kept in the accounting records of Excel showing Mars employees as Excel salesmen, can provide evidence of the existence of a conspiracy to defraud and the making of the book and the P35s also, in my view, acts in furtherance of a common design, namely for money to pass from Excel to Mars employees.”
[28]The approach to this kind of issue was dealt with fully by this court in R v Devonport and Pirano [1996] 1Cr. App. R.221 and R v Jones [1997] 2 Cr. App. R119. The issues relating to the admissibility of documentation of this kind in this situation are usefully summarised at pargraph 34–60c of Archbold (2007) edition where, relying on Devenport and Jones, the following is stated:
“It is a matter for the trial Judge whether any act or declaration is admissible to prove the participation of another. The Judge must be satisfied that the act or declaration (i) was made by a conspirator, (ii) that is was reasonably open to the interpretation that it was made in furtherance of the alleged agreement, and (iii) that there is some further evidence beyond the document or utterance itself to prove that the other was a party to the agreement ….”
[29]Earlier in the ruling from which we have quoted in paragraph 28 above, the learned Judge referred to the evidence of the Appellant signing ‘a large number of wholly fictitious purchase orders’. That, of course, related to the orders signed within the 70,000 series which he had admitted signing. The act of signing such an order was, of course, independent of the act of creating the invoice itself and the authorisation of payment required the mind of the Appellant to go to whether authorisation was justified.[30]It seems to us that, therefore, the learned Judge’s ruling was entirely in accordance with the approach summarised in the paragraph of Archbold to which we have referred and was amply justified by the material before her. We can see no basis for criticising this ruling.[31]The ruling given at that stage was on the basis of the exception to the hearsay rule afforded in appropriate circumstances in conspiracy cases. The Prosecution had indicated in its Case Statement that it would be submitted that the documents would also be admissible under section 117 of the Criminal Justice Act 2003. That issue was revisited during submissions made in the absence of the jury during the course of the summing up. Mr Matthews, Counsel for the Prosecution, invited the Judge to rule that the documents were also admissible under section 117. Mr Hackett reminded the Judge of two matters that he had put forward on this issue previously, namely, that the documents were not created in the course of a business (as required by sub-section 2(a)) but in the course of a fraud and, in any event, there was an effective discretion under sub-section 7 to exclude it.[32]In a short ruling given after argument about whether the jury should be given further assistance about the significance or otherwise they should attach to the documentation, the learned Judge said that she regarded the documentation as admissible ‘as business records’, but felt that the direction she had already given about the records was sufficient.[33]In terms of the pure issue of admissibility, we see no reason to doubt the Judge’s ruling even though the documentation may well have been produced for fraudulent purposes. We do not see, as a matter of principle, that that precludes recourse to section 117. However, at the end of the day, the issue is whether the jury were directed properly about the evidential significance of the documents irrespective of the route by which the documentation came to be admitted.[34]Drawing on what is now paragraph 34-61 of Archbold, it is argued that the Judge should have reminded the jury that the opportunity to challenge the records by questioning the makers of those records (Simpson and Harper) was not available and that they should not conclude that the Appellant was guilty merely on the effective say so of another.[35]What the learned Judge had said directly about the documentation is revealed in the following passages of the summing up:
“An examination of Excel’s documents accounts and audit papers, where they existed, provided evidence, say the Crown, that Excel had been defrauding Mars and making corrupt gifts to Mars employees. It has already been stressed, and it is right that I too should stress it, that these are documents relating to the internal workings of Excel. They would not have been seen by employees at Mars, nor would they, the employees of Mars, have been aware of Mr Harper’s accounting systems. It follows that Mr Gray himself would have had no knowledge of them.”
A little later on she said this:
“Members of the jury, you must consider what was the purpose of these accounting records and consider that in the light of all the evidence in the case. If you are sure that the handwritten notes and ledger entries depict a record of payment due to the person whose name or initials appear in the notes or to whom the code applies of at least some of the money attributed on those lists or in the entries in the ledgers, then the notes and the entries made are relevant evidence against Mr Gray. Similarly, members of the jury, consider the P35s and the lists of names under ‘sales commissions due’. If you are sure that the names are included as if they were employees of Excel in order to cover up the fact that they were dishonestly in receipt of sums from Excel then these P35s and sales commissions lists are also relevant evidence against Mr Gray. You must decide what the purpose of the 70,000 series was, and specifically whether they were used to cover orders from Mars in respect of which no-one did any work and on to which add ons could be made to generate payments from Mars which should not have been made.”
Towards the end of her summing up, when dealing with the essential issues under each count the learned

Judge said this:

“In deciding these issues do remember when the Crown alleged the Defendant has acted corruptly or that a document has been produced for a fraudulent, dishonest purpose, it is for them to make you sure of that, nothing less than being sure will do. As I have already said you must decide what the P35s, the sales commission, handwritten notes, the accrual notes and the LC codes and ledger codes are actually recording. The Defence submit that the Crown’s case that the ledger codes reflect payments to the persons linked to the codes is undermined by the evidence of Mr Soroko and Mr Brench who say they received only a fraction of what is recorded. There is also the document from Mr Harper’s own computer recording, as you saw, large sums of cash and a [Rosko] bonus coming in. It might, it is submitted, indicate that Mr Harper was seeking to deplete the profits of the company. As regards the 70,000 series of work orders you must decide what the purpose of this series was and specifically whether they were used to cover orders from Mars in respect of which no-one did any work and which would be used to generate payments from Mars which should not have been made. You must decide whether the flow of work from Mr Gray declined to a small number of jobs each year after his conversation with Mr Buchanan, and you must decide whether the purchase orders he place with Excel, 1999-2001, were for genuine work or were they - some of them –fictitious?”
[36]It is correct to say that the learned Judge did not, as she was invited to do by Mr Hackett, direct the Judge not to convict on the records alone. Equally, she said nothing about the lack of opportunity on the Appellant’s behalf to challenge the creators of those documents about their true meaning.[37]Whilst we think the learned Judge might have been better advised to give these records a more explicit ‘health warning’ than she did in the sense of reminding the jury that they had not had the opportunity of seeing a direct challenge being mounted to the content of these documents by questioning those responsible for making them, it is, of course, the case that every summing up on a matter such as this has to be tailored to the facts of the individual case. Reading the passages in the summing up we have quoted as a whole, particularly in the context of the very detailed appraisal of the totality of the evidence that the learned Judge gave, we have no doubt that the jury were fully aware of the need to consider the true import of the documents against the background of the rest of the evidence. That evidence included, crucially in our view, the acceptance by the Appellant of signing one hundred or so purchase orders in favour of fictitious companies that simply could not have done the work embraced within them. That those orders were placed and maintained consistently during a period when there was otherwise a general diminution in the work carried out by Excel for Mars was also evidence from which the jury could quite properly infer that the Appellant was a party to the general dishonesty being perpetrated.[38]Even allowing for the marginal criticism of the summing up to which we have referred, we do not think it could possibly be said that the conviction was unsafe. We have considered the other grounds raised and do not consider that they are sustainable. Accordingly, the renewed application for leave to appeal is refused.

Leave to appeal against sentence

[39]We can deal with this very shortly. Simpson and Harper, who were plainly the main perpetrators of the fraudulent activities, each received sentences of 6½ years on Count 2, sentences of 4 years being imposed concurrently on Count 1. The other Mars employee, Welcher, received a sentence of 4½ years on Count 2 and a concurrent 3 year sentence on Count 1.[40]Welcher did not appeal against his sentence, but Simpson and Harper did. The appeals failed, this court accepting that the learned Judge had correctly referred to the size of the sums obtained, the serious corruption involved, the duration of the fraud and the motivation for it. This court also acknowledged the substantial personal mitigation available to both appellants, but said that the sentences could not be faulted.[41]In the Appellant’s case the learned Judge said that he was ‘a much trusted employee of Mars and [that the case] was a really serious breach of trust.’ She also referred to the substantial benefit he derived from his conduct over a good many years. In our view, the sentence passed fully reflected those aggravating features and the personal mitigation that also arose also in his case. There is nothing in the point that this was a sentence passed under the old regime which means that the Appellant does not qualify for automatic release after serving half of the sentence. We will grant the extension of time for renewing the application, but the application for leave to appeal against sentence is refused. Confiscation Order[42]In giving leave to appeal against the Confiscation Order, Silber J said that he did so because the learned Judge failed to explain why she rejected the Appellant’s case and why the Prosecution case was accepted. He invited the full court to consider whether the Judge’s reasons were adequate.[43]The confiscation proceedings fall to be dealt with pursuant to the Criminal Justice Act 1988.[44]In accordance with usual practice, the Serious Fraud Office produced a Prosecutor’s Statement pursuant to section 73 of the 1988 Act. It suggested that the benefit obtained by the Appellant was to be assessed by reference to four sources or headings which we will, in the first instance, simply record as they appear in the Statement. We will turn to a fuller explanation in due course. The entries are as follows: 1. £375,776.31 Debits from the Expenses Accrued (PGM)/(Brepole) Account LC 9030 on Excel’s Accounting System (Doc 1009) from October 1994 to December 1999. 2. £88,508.50 Value of Brepole invoices not shown on the Expenses Accrued (PGM)/(Brepole) Account LC 9030 on Excel’s Accounting System (Doc 1009). 3. £75,285.00 Excel employee payments to Philip Gray for tax years 1991 – 1992 and 1992 -1993. 4. £31,872.50 Sales Commission Paid to PGM for Year 1993 – 1994. £571,442.31 Total[45]When inflated by the Retail Price Index, the total benefit from these four sources was said to be £727, 651.43. In fact certain deductions were agreed between the parties at the Confiscation Hearing which resulted in that figure being reduced to £679,681.13. However, as we understand it, the agreement as to that figure was, at least from the Appellant’s point of view, without prejudice to some more fundamental objections to the calculations under the four headings to which we have referred. We will turn to those objections shortly, but it is also to be recorded that the Prosecution and Defence agreed the amount of the Appellant’s realisable assets in the sum of £627,170 which, as we recorded in paragraph 5, was the amount of the confiscation order made by the Judge.[46]The judge held that the benefit to the Appellant from the offences of which he was convicted amounted to £679,681.13, the corrected figure referred to above. Since that exceeded the Appellant’s realisable assets, the maximum amount that could be made the subject of the confiscation order was the amount that might be realised (see section 71(6) of the 1988 Act) which, as we have indicated, is the amount that the Judge ordered.[47]We return to the four constituent elements of the benefit alleged by the Prosecution to have been received by the Appellant as set in paragraph 46 above in order to explain the way the Prosecution puts its case: 1. Although chronologically later than numbers 3 and 4, this reflected the basis upon which the most substantial constituent element put forward was arrived at. As indicated in paragraph 22, there came a time when Excel introduced a computer accounting system called Pegasus. This came on stream from about the middle of 1994 and, until the Millennium Bug struck at midnight on 31 December 1999, it was the system in use. We have already noted that the Appellant had been assigned the ledger code LC9030. An analysis was carried out of that which was recorded on the Pegasus system against that code. It revealed a significant number of entries relating to the Appellant in connection with the fictitious company or firm called Brepole Engineering, virtually all of which were given numbers within the 70,000 series. There is a further aspect to the analysis of the Pegasus system between these dates that is relevant to the confiscation issue, but to which we will return in due course. For present purposes, what needs to be noted is that what the Prosecution was saying in relation to benefit in this context is that the Appellant was being effectively paid what was shown within the Pegasus system as having been paid to Brepole. The manner in which this was done was to draw cash on Excel’s account (which was then paid to the Appellant), the cheque stub, however, recording that the cheque was made out to Brepole. The invitation of the Prosecution to the Judge was to conclude that these sums in aggregate represented the benefit he received during this particular period. 2. The second feature of the Prosecution analysis of the benefit to the Appellant arises from consideration of what occurred from 1 January 2000 until Excel was sold in June 2001. New accounting software was introduced by Excel for this period, but, we are told, for reasons of economy and resources, the Serious Fraud Office did not carry out an equivalent exercise for this period as it did for the period when the Pegasus system was in operation. Attention was restricted to the surviving Brepole invoices to Excel and the invitation to the Judge was to conclude, on the balance of probabilities, that the Appellant remained the beneficiary of the amounts reflected in these invoices on the basis that the system in operation prior to 31 December 1999 was likely to have continued thereafter. 3. The third arose from records that appeared to show that the Appellant (along with others) was an employee of Excel in the tax years 1991-1992 and 1992-1993 whereas, of course, he was not. It will be recalled (see paragraph 22 above) that this was one means adopted, the Prosecution allege, to cover up the bribes paid and effectively to account for them in the books of Excel. 4. The fourth area that afforded evidence, the Prosecution allege, of benefit received by the Appellant is in relation to ‘sales commissions’ for which he was credited in the Excel books in the year 1993-1994. The figure relied upon is the figure recorded by Excel’s auditors as the total sales commissions paid to the Appellant for the year to 30 June 1994. The invitation of the Prosecution is to conclude, on the balance of probabilities, that this was the means by which the Appellant received bribes during this period and that he received the totality of the sums referred to.[48]There is one common thread throughout the whole period of the fraud, the Prosecution alleged, namely, that whatever bribe was paid to the corrupt Mars employee, the amount was doubled up (in other words, increased by 100%) and transferred to a fund for the benefit of the directors. The overall sum Excel sought to charge Mars would reflect this “doubled-up” sum.[49]The objections to the foregoing approach were set out in a detailed Response prepared on the Appellant’s behalf and served on the Prosecution on 2 October 2006. Although there was a further exchange submission and counter-submission thereafter, that Response set out the basis of the position taken on the Appellant’s behalf at the Confiscation Hearing.[50]The objections advanced on behalf of the Appellant to the way that the Prosecution put forward its case in relation to benefit can be summarised as follows: 1. It was asserted that there was no direct evidence that the cash withdrawn by Simpson and Harper against the cheque stubs made out to Brepole were paid to the Appellant, whether wholly or partly. Attention was drawn to evidence given by the witnesses Brench and Soroko that the amount they received by way of bribes did not come anywhere near the figures shown in their respective Expenses Accrued Accounts Schedules. It was suggested that their account was supported by the evidence of Buchanan who was the main witness in the case against the Appellant, in the sense that he explained in his evidence-in-chief at the second trial that if, for example, Brench wanted £100 he had to put £250 onto the order. The Defence also drew attention to one of the documents recovered from Harper’s personal computer which, it was suggested, demonstrated in relation to the particular cheque stub referred to in connection with that document that Harper had personally received half of the amount attributable to Soroko. Challenge was also made to the assertion that the usual ‘uplift’ on the amount of an invoice (which uplift would go to the Excel directors) was usually 100%. It was suggested that it would be fairer to the Appellant to reduce the sums recorded against him by 40% so as to bring the benefit into line with the evidence that Buchanan had given about Brench. 2. Again, it was asserted that it would be fairer to reduce the sum claimed by 40% for the reasons given in 1 above. 3. The submission was that the evidence in support of the figure claimed under this heading was insufficiently reliable to be fairly taken into account and that the whole sum should be excluded for that reason. It was suggested that the lack of evidence of any National Insurance ever being paid for the Appellant undermined the reliability of the figures given. 4. Again, the reliability of the figure claimed was challenged. Attention was drawn to the evidence of Brench, suggesting that what he actually received was far less than appears to have been recorded by way of ‘Sales Commissions’.[51]The foregoing indicates how the battle lines were drawn prior to the hearing before Judge Smith in relation to Confiscation. We understand that no oral evidence was given and that the matter proceeded by way of oral submissions based upon the matters set out in paragraphs 47 and 50 above.[52]In her ruling, the learned Judge started by referring to the evidence given by an accountant who acted as Excel’s auditor, a Mr Stringfellow, at the first trial. He had said that he had been told by Harper that a Sales Commission book was kept by Simpson for each salesman. (The truth, of course, was that the individuals concerned were not salesmen at all, but employees of Mars who were paid by Excel.) Harper told him that for each job upon which they received a commission, it was noted and totalled up at the end of the month and the sum entered into what was known as the accrual account. The accrual was then doubled up by amounts made payable to a fund for the company’s directors, namely, Harper and Simpson. The learned Judge went on to say that that set the scene for the fraud that was operated for over a decade. She concluded that, whilst the methods by which the fraud was managed and covered up varied, throughout the whole period it operated, it did so on the basis of Harper ‘doubling up or adding on to the fictitious sum due to the Mars employee.’[53]Although for reasons to which we will refer, we have reviewed the evidence and formed our own view of the position, that was an important finding which, in our judgment, was amply justified by the evidence. Mr Matthew has demonstrated to our satisfaction that this procedure of doubling up, which was first noted by Mr Stringfellow in 1993, was continuing throughout the period of the Pegasus system. Since the procedure was so well established, we have no difficulty in concluding that it continued until Excel was sold in 2001.[54]This finding means that any suggestion that a bribe paid to a Mars employee, for which disguised provision was made in Excel’s accounts, had to be divided in some way to reflect some benefit to Harper and Simpson could not and cannot be maintained. Subject only, therefore, to the question of whether the evidence of Soroko, Brench and Buchanan casts doubt on whether the actual amounts received by those bribed was less than shown in the records, and whether those records do indeed show that bribes were paid, there is no basis for discounting the sums reflected in the records for the reasons put forward on the Appellant’s behalf.[55]Should the evidence of the witnesses Soroko, Brench and Buchanan have made the impact contended for by the Appellant? The matter was raised before the learned Judge. She dealt with it, albeit obliquely, by simply saying, that unlike Mr Brench, the Appellant was in effect a department of one and that there would not be, as there might have been in Brench’s case, a reason for paying him personally less than the full amount recorded so that other people in the department might obtain a share.[56]Whilst that may well have been a material consideration, more compelling, in our view, would have been the proposition that since each of these witnesses had himself been guilty of a criminal offence (albeit none were prosecuted for it), there was good reason for each to minimise what each had done and had obtained as a result. At all events, the learned Judge was not persuaded that their evidence impacted on the Appellant’s position and we agree.[57]The principal issue is whether the learned Judge was right to conclude that the ledger entries in the Pegasus accounts did indeed reflect the payments made by Excel to the Appellant. The reason for stating the issue in this way is that if it was right so to conclude, it would be difficult to see why anything should have been different either before the Pegasus system was introduced or indeed after. There can be no doubt that the period when the Pegasus system was in operation was, at least so far as the documentation available at the trial was concerned, the best documented and it is, therefore, understandable why attention has been focused upon it.[58]We are quite satisfied that the learned Judge was right to attach significance to this period for the reasons we have given. Indeed we suspect it afforded the jury the most compelling evidence of the Appellant’s involvement in the dishonest system in operation. It demonstrated that the Appellant was linked to many occasions when Excel drew cash in various sums on its own bank account, but pretended to have drawn the cheque in favour of Brepole by so recording on the cheque stub. Give that Brepole was a fictitious entity and the Appellant had effectively ‘nodded through’ work said to have been carried out by Brepole, the inference that the cash was destined for him is strong. It is reinforced by the overwhelming evidence that sums shown on the Pegasus system as having been paid to the company created by the Welchers (but which in reality did nothing) was in fact paid to that company. In other words, the Pegasus accounting system was accurate in relation to what they received. Why should it not be accurate in relation to the Appellant? Miss Crinnion, for whose helpful submissions we express our appreciation, was unable to offer a satisfactory answer to this other than to try to distinguish between cheques drawn in favour a company which was merely a vehicle for the payment of the bribe and cheques drawn as to cash with the pretence that the money went to a company. In this context, the distinction is unreal.[59]Although the learned Judge did not refer to this argument, it is, in our view, a compelling one. However, the conclusion to be reached is that, certainly during what we will call ‘the Pegasus period’ the evidence is clear and compelling for the reasons given by the learned Judge supplemented by the matters to which we have referred.[60]As we have observed already, if that is the conclusion to be derived from that period, why should the position have been any different in substance either before or afterwards? The internal accounting systems may have been different, but that is not the issue. Unfortunately, the learned Judge said nothing directly in her ruling about headings 2, 3 and 4 set out in paragraph 45 above. It may well be that she had formed the view that the answer to the question posed in the first sentence of this paragraph was that there was plainly no difference and that it was unnecessary to refer specifically to the way the separate headings had been formulated. The difficulty with not having dealt with them specifically is that it has led the Appellant to argue that he did not understand why his case was rejected, the Prosecution to recognise that fuller reasons would have been helpful, the single judge to express himself in the way that he did and the Full Court being obliged to review the evidence in detail to see if the Appellant’s arguments were sound. The reason for taking the latter course is that the power to remit the case for further reasons or consideration does not exist.[61]At all events, we agree with the overall conclusion reached by the learned Judge (subject to one minor adjustment, to which we will refer shortly). However, we would express our conclusions in relation to headings 2, 3 and 4 in this way- a) The compelling evidence of the Pegasus period is sufficient of itself to lead to the inference that both during the period when ‘Sales Commissions’ and salary were recorded as having been paid to the Appellant and after the Pegasus period ended, the Appellant was receiving in cash the sums mentioned in the records; and b) those records were accurate in the sense that they had been verified by the (albeit unsuspecting) Excel auditors; and c) there is no rational explanation for Harper and Simpson to have recorded inaccurate information about what was paid.[62]We might add that we are fortified in concluding that the Appellant was indeed receiving corrupt cash payments since it was not, as we understand it, disputed that between 1993 and 2000 large capital payments totalling a little over £136,000 were made against the mortgage of £145,000 on the Appellant’s home. This would doubtless have represented only part of what he received.[63]The only adjustment to the learned Judge’s findings which we feel obliged to make, given the way matters were presented before us, is in relation to heading 3. Mr Matthew had to concede that there was a question mark over the amount shown in the Excel records as having been paid to the Appellant in the tax year 1992-1993. The figure in Appendix C to the Prosecutor’s Statement that had been included in heading 3 appears to relate to 1994-1995. That may be a mistake and the figure of £33,295.00 may indeed relate to 1992-1993, but the answer could not be given to us.[64]In those circumstances, and bearing in mind that the burden of proof is on the Prosecution, we think it right to reduce the amount said to have represented the benefit received by the Appellant by the sum of £33,295.00 as increased by the Retail Prices Index which we understand to be £46,779.47. Reducing the figure found by the learned Judge by that sum yields a total benefit figure of £632,901.66. Since, however, the Appellant’s agreed realisable assets were less than that sum, the Confiscation Order must remain in the sum ordered by the Judge.[65]Subject to the modest adjustment concerning the amount of the benefit received by the Appellant to which we have referred (and our finding will be available should it ever become relevant), the appeal against the Confiscation Order is dismissed.