Gangar & Anor v Serious Fraud Office [2015] EWHC 446 (Admin)

Case No. CJA/30/2013 [Gangar]

CJA/33/2013 [White]

[2015] EWHC 446 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 25/02/2015

Before

THE HONOURABLE MR JUSTICE KENNETH PARKER

Between

IN THE MATTER OF ALAN WHITEClaimants

IN THE MATTER OF SHINDER SINGH GANGARClaimant

SERIOUS FRAUD OFFICEDefendants

IN THE MATTER OFDefendant

THE CRIMINAL JUSTICE ACT 1988Defendant

(As amended by the Criminal Justice Act 1993 andDefendant

The Proceeds of Crime Act 1995.Defendant

Nathaniel Rudolf (instructed by Messrs Janes) for Claimant Gangar

Rex Tedd Q.C. (instructed by Frisby & Co, solicitors) for Claimant Alan White

Sheena Cassidy (instructed by Serious Fraud Office) for Defendants

Hearing Hearing Dates: 3 October, 6-10 October, 17 October 2014

Judgment

BACKGROUND

[1]Shinder Singh Gangar (“SSG) and Alan White (“AW”) were accountants and partners in a firm of accountants, Dobb White & Co. (“Dobb White”). The firm had offices in Leicester and Nottingham. From at least October 2001 the firm operated a series of apparently plausible but fraudulent “Ponzi” schemes. There was no underlying trading in investments and the success of the fraud typically relied on the continuing addition of the funds of new victims to finance the payments of “interest” to earlier victims. Clients were promised eye-watering returns exceeding 40 per cent per annum, and even as high as 160 per cent. Monies received were transferred to foreign bank accounts.

[2]A significant element of the fraud was the Vavasseur programme. A US citizen, Terry Dowdell, apparently claimed that he had access to a covert banking market through which he could purchase heavily discounted bonds in large denominations for resale at vast profit. The market was, of course, fictitious, and Vavasseur was no more than a huge Ponzi scheme, one of the largest (possibly reaching $200 million) until Bernie Madoff plumbed unprecedented depths of fictitious fraudulent trading. Dobb White placed substantial client funds with Vavasseur, and could fairly be described as the British branch of the Dowdell fraud. The balloon decisively went up on 4 June 2002 when Terry Dowdell admitted his fraud before a Federal District Court in Virginia. In 2004 he was sentenced to 15 years’ imprisonment, and a number of his US associates also received substantial prison sentences.

[3]The investigation into Dobb White began in September 2002. SGG and AW were arrested on 23 October 2002, and were charged with fraud in October 2005. On 12 June 2007 (two weeks before their trial began) SSG and AW dismissed their legal teams and chose to represent themselves at trial. The trial began on 3 July 2007 before Mr Justice Langstaff and a jury in Birmingham Crown Court. Neither SSG nor AW gave evidence at the trial.

[4]The trial lasted 8 months and on 22 February 2008 SSG and AW were convicted of fraud. SSG was sentenced to 7½ years imprisonment, and AW was also sentenced to a total of 7½ years’ imprisonment.

[5]On 2 December 2003 SSG had been declared bankrupt by an order of the High Court. Mr Geoffrey Carton-Kelly, a partner in the firm of Baker Tilly, was appointed trustee in bankruptcy of the estate of SSG with effect from 12 January 2004. Dobb White was made the subject of a compulsory winding up order on 2 December 2003. The same partner of Baker Tilly was appointed liquidator of Dobb White with effect from 12 January 2004 by the Secretary of State for Trade and Industry. The liquidator had realised various assets by the time that the confiscation orders were made. Mark Wilson of Baker Tilly has since replaced Mr Carton-Kelly as trustee and liquidator.

[6]In July 2002 Roy Terry and the US law firm, Durette Bradshaw, were appointed as joint Receivers in relation to Terry Dowdell and other associated persons. On 14 February 2003 they were also appointed joint receivers for the Vavasseur Corporation.

[7]SSG and AW sought to appeal their convictions. Leave to appeal was refused on 7 July 2009. On 4 and 7 January 2010 they made applications to the European Court of Human Rights.

[8]Confiscation proceedings followed. Mr Justice Langstaff conducted the hearing which itself lasted 8 weeks, with SSG and AW giving evidence. On 2 July 2010 Langstaff J delivered a reasoned judgment exceeding 100 pages. The benefit of each of SSG and AW from the fraud was agreed in the sum of £60,750,000. The judge assessed SSG’s realisable assets at £2,750,000 and AW’s at £1,200,000. Confiscation orders in those sums were made on 28 July 2010, under the Criminal Justice Act 1988 (“CJA”), as amended.

[9]SSG and AW appealed against their confiscation orders. The Court of Appeal adjusted the orders on 21 June 2012: the trial judge had double-counted assets belonging jointly to the defendants as belonging to each defendant individually.

[10]AW’s confiscation order was adjusted to £686,996.81 and SSG’s order to £2,289,974.03. In default of payment, AW is to serve a term of 3½ years imprisonment. SSG is to serve a period of 6 years. The Court of Appeal declined to give the defendants additional time to pay the orders. Accordingly, time to pay has elapsed. As the orders were made under the Criminal Justice Act 1988 as amended, should the default terms be activated, this will not expunge the debt.

[11]Enforcement proceedings were commenced in the Leicester Magistrates’ Court against SSG and AW. These proceedings were adjourned after SSG and AW said that they intended to apply for a certificate of inadequacy.

[12]On 24 May 2013 SSG applied for a certificate of inadequacy pursuant to s.83 of the Criminal Justice Act 1988 (“CJA”). On 6 June 2013 AW also applied for a certificate of inadequacy.

[13]In determining the realisable assets of the defendants, Langstaff J was aware of the chronology of investigations into the actions of SSG and AW and the fraud. They had been aware for some time that their actions were either being investigated or likely to be investigated. The chronology was relevant when considering whether they had entered into a series of complicated transactions in order to put assets out of reach, or whether, as asserted by them, they had in fact had no realisable assets by the time of the confiscation hearing. The relevant chronology is as follows.

[14]On 27 November 1998 the assets of SSG and AW were frozen by court order. This related to an alleged scam which had resulted in $15.7 million being placed with Eryl Management, a company which SSG and AW ran. The defendants undertook to return the capital to investors and largely did so. According to the judgment of Mr Justice Langstaff, they asserted that this experience and their sense of being unjustly accused led them to seek to “protect” their assets.

[15]On 17 June 1999 Eryl Management entered into a discretionary investment management agreement with the Vavasseur Corporation.

[16]On 11 August 2000 SSG pleaded guilty to an information laid by the Financial Services Authority alleging offences relating to his failure to provide information without reasonable excuse.

[17]On 16 January 2001 the SFO and FSA raided the offices of Dobb White and the homes of SSG and AW.

[18]By the end of October 2001, if not earlier, SSG and AW took over the administration of the Vavasseur scheme.

[19]On 19 November 2001 the Security and Exchange Commission (“SEC”) in the US brought enforcement proceedings against Dowdell and he was made subject to a freezing order. The following day SSG was told that the Vavasseur scheme was a Ponzi fraud.

[20]On 2 April 2002 the SEC issued a press release stating that Dowdell had admitted that the Vavasseur scheme was a fraud.

[21]On 14 May 2002 assets held in Ireland at the Allied Irish Bank (“AIB”) on behalf of Dobb White clients were frozen by the Irish authorities.

[22]On 24 May 2002 SSG was interviewed by the police about his knowledge of the scheme which he was told was a Ponzi fraud.

[23]On 4 June 2002 Dowdell entered a formal consent and stipulation before a US court whereby his guilt in running the Vavasseur fraud was accepted by him and he agreed with a lengthy and detailed schedule of illegal behaviour. SSG was again interviewed by the police on 11 June 2002.

[24]At the confiscation hearing Mr Justice Langstaff noted that by the end of May/beginning of June 2002 money was still “flooding in” to Dobb White and that it must have been obvious to anyone concerned with running the fraudulent scheme that its days were numbered.

[25]On 19 August 2002 PWC placed a closure on the door of Overseas Development Bank and Trust (“ODBT”), which had later become the Investors Bank and Trust (“IBT”) in Dominica. Its accounts with Fortis Bank in the Netherlands were frozen. On 6 September 2002, PWC wrote to Dobb White stating that it held or controlled $4.8million of assets belonging to ODBT.

[26]On 23 October 2002 the various premises of Dobb White were raided, as were the homes of SSG and AW. A freezing order was granted by Mr Justice Ferris.

[27]In the light of the above, Mr Justice Langstaff identified as a critical period the period between May and September 2002. The judge considered that there would have been a growing realisation in May 2002 that, so far as the fraud was concerned, the “net was closing in”.

[28]It is necessary to consider the whole judgment of Langstaff J in the confiscation proceedings, but certain observations are worth recording at this point.

[29]The learned

judge noted:

[30]As regards SSG’s credibility, Mr Justice Langstaff said this: “I regret that I have come to the conclusion that I cannot accept anything which Mr Gangar says unless it has independent support or the probabilities cogently and independently favour his account. I have many reasons for this. I do not base myself on the conclusion I have just expressed but on the totality of the evidence and the way in which he gave it. First, he lied on several occasions. This was not only to investors to advance the operation of the scheme, as to which there was a considerable volume of evidence at trial, but to regulatory and police authority to conceal involvement in the scheme. I need single out only a few examples because there are so many. … Gangar was driven to accept not just that he was being economical with the truth in his interview but, as he accepted in answer to Mr Curtis, very very very economical. He now admits that he told untruths to investors. Again and again he was obliged to admit in cross-examination that he had been less than frank or had lied when he spoke to the police or to his trustee in bankruptcy… … Next, he has plainly no respect for the authorities or the legalities that should govern his conduct. His attitude to the freezing order is plain. He disregarded it. He accepts that he did so… The evidence suggests that he will do what is necessary to suit him on any occasion as, for example, again, his theft from Martin. He was convicted of very sophisticated fraud, was plainly manipulative. He appeared to think there was nothing untoward with asset protection. Since this involved putting money outside the knowledge of the authorities with a view to hiding the reality of a transaction rather than admitting it. I find this view unacceptable.” (Transcript, page 27-23).

[31]Mr Justice Langstaff later noted: “I take into account the fact that so many people came up with money for Mr Gangar when he says he told them he was bankrupt with great personal financial difficulties. He is plainly someone who is able to extract money from others. It is plain he has very considerable personal charm but it is not difficult to understand, in the light of the evidence, that his claim from time to time to be able to raise money was appropriate and he would have access to assets. I regard as disturbing his assertion that there need be no accounting records in relation to funds in the hands of others because, they being old friends, would pay over the money exactly as he asked when he asked, and he gave us one example, Jan Kaart (sic). He suggested that private arrangements need not go on ledgers. It seems to me very much to depend on the accounting concerned and this view was extended too far.” (Transcript, page 28).

[32]Regarding payments made to SSG’s family and friends Mr

Justice Langstaff stated:

“Mr Gangar has said, and said (inaudible) his account to his former solicitors, that he had a black book in which he personally kept records of distributions from the Dobb White scheme in cash which otherwise would have gone unrecorded, the reason being that these were to family and friends. I am told by counsel, rather than by direct evidence, that the black book was never discovered when the authorities went to seize property but I see some force in the point made by Mr Tedd and Mr Cox that it might be difficult now to identify precisely what is being referred to when a legion of documents was recovered and I hope that, in saying what I have and saying what I will, I take full account of those matters. Mr Tedd notes in his written submissions that there is no proper case here to stop the trial for abuse for reasons of non-disclosure.”

The Law and legal principles

[33]Section 83 of CJA provides that: (a). by the defendant…. the High Court is satisfied that the realisable property is inadequate for the payment of any amount remaining to be recovered under the order the court shall issue a certificate to that effect, giving the court’s reasons. 35. For the purposes subsection (1) above- (a). in the case of realisable property held by a person who has been adjudged bankrupt or whose estate has been sequestrated the court shall take into account the extent to which any property held by him may be distributed among creditors; and (b) the court may disregard any inadequacy in the realisable property which appears to the court to be attributable wholly or partly to anything done by the defendant for the purpose of preserving any property held by a person to whom the defendant had directly or indirectly made a gift caught by this Part of this Act from any risk of realisation under this Part of this Act.

[34]Section 74 provides:

“In this Part of this Act, “realisable property” means, subject to subsection (2) below- (a) any property held by the defendant; and (a) any property held by the defendant; and (b). any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Part of this Act… …(3) For the purposes of this Part of this Act the amount that might be realised at the time a confiscation order is made is- (b). the total of the values at that time of all the realisable property held by the defendant, less (c) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations, together with the total of the values at that time of all gifts caught by this Part of this Act. (4). Subject to the following provisions of this section, for the purposes of this Part of this Act the value of property (other than cash) in relation to any person holding the property- (d) where any other person holds an interest in the property is- (i) the market value of the first-mentioned person’s beneficial interest in the property, less (ii) the amount required to discharge any incumbrance (other than a charging order) on the interest; and (b) in any other case, is its market value. (5) References in this Part of this Act to the value of any time (referred to in subsection (6) below as “the material time”) of any property obtained by a person as a result of or in connection with the commission of an offence are references to- (e) the value of the property to him when he obtained it adjusted to take account of subsequent changes in the value of money; or (f) where subsection (6) below applies, the value there mentioned, whichever is the greater. (6) If at the material time he holds- (g) the property which he obtained (not being cash); or (h) property which, in whole or in part, directly or indirectly represents in his hands the property which he obtained, the value referred to in subsection (5)(b) above is the value to him at the material time of the property mentioned in paragraph (a) above or, as the case may be, of the property mentioned in paragraph (b) above, so far as it so represents the property which he obtained, but disregarding any charging order.”

[35]Section 102 further provides:

“(7) Property is held by any person if he holds any interest in it. (8) References to property held by a person include a reference to property vested in his trustee in bankruptcy, permanent or interim trustee within the 42. meaning of the [1985 c. 66] Bankruptcy (Scotland) Act 1985 or liquidator.” (9). References to an interested held by a person beneficially in property include a reference to an interest which would be held by him beneficially if the property were not so vested.”

[36]In Glaves v CPS

[2011] EWCA Civ 69

the Court of Appeal approved the approach summarised in B

[2008] EWHC 3217

“(1) The burden lies on the applicant to prove, on the balance of probabilities, that his realisable property is inadequate for the payment of the confiscations order (see Re O’Donoghue ]2004] EWCA Civ 1800 per Laws LJ as para 3). (1) The reference to realisable property must be to “whatever are his realisable assets as a whole at the time he applies for the certificate of inadequacy. If they include assets he did not have when the confiscation order was made, that is by no means a reason for leaving such fresh assets out of consideration” (Ibid and see also Re Phillips [2006] EWHC 623 (Admin) (2) A s.83 application cannot be used to go behind a finding made at the confiscation hearing or embodied in the confiscation order as to the amount of the defendant’s realisable assets. Such a finding can only be challenged by way of an appeal against the confiscation order. (see Gokal v Serious Fraud Office [2001] EWCA Civ 368, per Keene LJ at paras 17 and 24). (3) It is insufficient for a defendant to say under section 83 “that his assets are inadequate to meet the confiscation order, unless at the same time he condescends to demonstrate what has happened since the making of the order to realisable property found by the judge to have existed when the order was made”, (see Gokal para 24 and Re O’Donoghue at para 3). (emphasis added) (4) The confiscation hearing provided an opportunity for the defendant to show that his realisable property was worth less than the prosecution alleged. It also enabled the defendant to identify any specific assets which he contended should be treated as the only realisable property. The section 83 procedure, however, is intended to be used only where there has been a genuine change in the defendant’s financial circumstances. It is a safety net intended to provide for post-confiscation order events. (see McKinsley v Crown Prosecution Service [2006] EWCA Civ 1092 per Scott Baker LJ at paras 9,21-24,31 and 35)/ (emphasis added). (5) A Section 83 application is not to be used as a “second bite of the cherry”

. It is not an opportunity to adduce evidence or to present arguments which could have been put before the Crown Court Judge at the confiscation hearing (para 38 of Gokal and paras 23,24 and 37 of McKinsley)” (emphasis added)

[37]In Glaves the Court of Appeal emphasised that there were two undisputed propositions. First the applicant had to show what had become of the sum assessed as hidden assets. Then, “38. The second was that the procedure for applying for a certificate of inadequacy is intended to meet a situation where a defendant can show that events since the makingof the confiscation order have had the effect that his assets are insufficient to enable him to pay the full amount of the order.” [emphasis added].

[38]In particular the Court of Appeal observed “The starting point for considering any application for a certificate of inadequacy is the confiscation order itself. Since the burden of proof at the time of the asking of a confiscation order is on the defendant to show that his available assets are less than the benefit figure, it follows that there may be cases in which a confiscation order is properly made in a larger sum than the defendant is in truth able to pay, and this may result in him having to serve a period of imprisonment in default for failing to pay what he cannot pay. It may be that the defendant has been dishonest or cavalier in his evidence or it maybe that, although truthful, he has not been able to produce evidence sufficient to discharge the burden of proof which rests on him. In the case of money which has gone through a bank account in modest amounts over the course of time and for which he has not kept detailed records, he may be unable to give more than a generalised explanation.”

[39]At paragraphs 36-38 of Gokal v. Serious Fraud Office

[2001] EWCA Civ 368

, the Court of Appeal considered the difference between evidence of dissipation before and after the making of the confiscation order. It noted that:

“The court dealing with the confiscation order has a discretion under section 74(10). Such a gift is only caught by Part VI if the court “considers it appropriate in all circumstances to take the gift into account.”

The fact that a gift has been dissipated will not automatically prevent it being “appropriate” to take it into account: see the reasoning in R-v-Liverpool Magistrates Court, ex parte Ansen [1998] 1 AER 692 at 701. But it will be a highly relevant consideration as can be seen from the fact that once a gift is no longer held by the donee, proceedings to recover it under section 82 and the associated powers can no longer be taken. If past dissipation is to be raised, it should be raised and dealt with by evidence at this stage of the confiscation order in relation to the issue of appropriateness. To produce such evidence, which could have been produced at the hearing into the making of the confiscation order, on an application under section 83 for a Certificate amounts to saying that it was not “appropriate” to include such a gift in the amount to be realised. Such an attack on the judge’s ruling can only be done by way of appeal. 38. It is nowhere suggested in the witness statement of Mr Cowell lodged in support of the section 83 application that the evidence of the recipients of these gifts could not have been produced at the Crown Court hearing or at least at the subsequent appeal. These recipients were relatives of the defendant and one of them at least was in court at the confiscation order hearing. Evidence as to the past dissipation of gifts, if it is to be relied on at all, must be produced at that stage of the process. Section 83 is not to be used as if it were a further appeal stage or for a second bite of the cherry. In my judgment, it is an abuse of process to seek to challenge the inclusion of these gifts in the order on such a basis, and yet that is what this argument amounts to.”

[40]In R v Modjiri

[2010] EWCA Crim 829

, which was a case decided under the provisions of the Proceeds of Crime Act 2002 (“POCA 2002”), the Court of Appeal considered at para 27 that:

“It is clear that if a Defendant proves that it is impossible to realise an asset, what is contended as its value cannot be included in the Defendant’s recoverable amount: see, eg, Houssam Ali [2002]EWCA Civ 1450 at para 11; Chen [2009] EWCA Crim 2669 at para 27, [2010] Crim LR 315. But that is not this case. Similarly, such impossibility may justify a variation of the order under s.23.”

[41]However, in the case of R v Liverpool Magistrates’ Court, ex p Ansen

[1998] 1 All ER 692

, the Court of Appeal considered that the fact an asset was difficult to realise was not sufficient for a certificate of inadequacy to be granted:

“Mr Talbot submits that the fact that an asset may be difficult to realise is simply not relevant. The provisions of the Act, he submits, define “realisable property” in terms of s 5 and do not address any question of whether in practical terms it is difficult to recover the money. I agree with that submission for two reasons. Firstly, the definition of “realisable property” includes property held by the defendant and by definition “property” is held by any person if he holds an interest in it and the “interest” in the property includes a right. Accordingly, if as Mr Ansen’s affidavit indicates, the sum of approximately £8,500 held by agents in Germany is an amount which he is entitled to recover, then it is realisable property by definition irrespective of any difficulty in its actual recovery. Secondly, s 5(1)(b) of the 1986 Act, referring as it does, to “realisable property” including “gifts caught by the Act”, necessarily means that circumstances may arise where gifts which an Applicant has made be practically, even legally, irrecoverable, but they are nevertheless still regarding as realisable property under this draconian Act. The purpose of these draconian procedures is obvious: they are intended as has often been said, to make it as difficult as possible for those who traffic in drugs to get away with the proceeds of that traffic. Accordingly, in my judgment Mr Talbot is correct in his submission that the £8.500 paid in relation to this summer house is to be taken as realisable property.”

vested in his trustee in bankruptcy, permanent or interim trustee within the

[42]In Najafpoor

[2009] EWCA Crim 2723

the claimant submitted that:

“even if the debt were property within the meaning of section 84, once the judge had accepted that the monies were in practice irrecoverable, then they should not have been included in the Order. They were no longer available assets”

[emphasis added].

[43]The Court of Appeal considered that:

“If it is impossible to recover the debt then it would be quite inconsistent with the structure of the Act... to trigger the default sentence,” and observed: “The court may quite properly wish to have evidence from the defendant of the steps he has taken to recover the sums before he is able to satisfy the court that the debt is in practice worthless.”

[44]In my view Najafpoor is entirely consistent with what was said in Modjiri and Ansen. Mr Justice Langstaff in the confiscation proceedings held that none of the identified amounts were “impossible of realisation”

[45]I turn now to consider the property that has been the subject matter of the applications, and begin with property jointly attributable to SSG and AW.

The Banamex funds

[46]A considerable amount of time was devoted at the hearing to £467,110.90 held in the Banamex bank account in Mexico of the Secured Clearing Corporation (“SCC”).

[47]This account was controlled by an individual (and fraudster),Gary McDuff, and utilised on behalf of SSG and AW. At the beginning of November 2002 the account held a balance of $690,857. On 11 November 2002 Banamex Citigroup wrote to IBT, SCC and McDuff notifying them that Banamex had decided to terminate, as of 11 November, the business relationship and that it had closed the SCC account. Banamex said that it had issued money orders in US dollars for the US dollar accounts, in each case payable to the named account holder. Bank statements for the account do show closure of the account on 11 November 2002.

[48]In his judgment Mr Justice Langstaff noted that it was not until March 2003 that McDuff had appeared to claim some money from SCC. On the material that I saw I have very considerable doubt whether McDuff did bring and carry forward a legal action against Banamex. In any event the judge considered that the money might be in the hands of McDuff or in the hands of the bank. He was of the view that McDuff was complicit and any money which he had which derived from SCC was “to the extent it exists” the property of SSG and AW. He noted that the position was not entirely satisfactory as Mr Carton-Kelly was still enquiring as to the presence and whereabouts of the money.

[49]It now appears to be finally accepted that the money held in the Banamex account of SCC was in fact money belonging to Dobb White clients. McDuff was a close friend and he let Dobb White use the SCC account at Bannamex for Dobb White affairs.

[50]It appears that McDuff, who had a previous felony conviction, was a leading light, if not the mastermind, in a substantial Ponzi fraud in the United States (the Lancorp Fund and its investment in the Megafund Ponzi Scheme). Following a trial in March 2013 in a District Federal Court in the United States, he was on 13 August 2013 convicted of conspiracy to commit wire fraud and of laundering money instruments. In April 2014 he was on those counts sentenced to 25 years’ imprisonment and ordered to pay $6.5 million in restitution.

[51]In respect of the Banamex funds, I make the following findings.

[52]Banamex continues to hold the funds and treats the funds as remaining in the original account, as confirmed on 25 April 2014 by an employee of Banamex. The same employee confirmed that Banamex would release the funds if a properly authorised representative of SCC attended the branch at which the account has been held and opened a new current account, or if there was a court order (presumably an order recognised as binding on, and enforceable against, Banamex in Mexico). Banamex has not asserted, either orally or in writing, that it will not release the funds to a properly authorised representative of SCC.

[53]Furthermore, since the imposition of the confiscation orders, neither SSG nor AW has exercised the level of diligence and endeavour that this Court demands should be exercised by those subject to such orders for the purpose of realising the assets in question.

[54]The initial position at the confiscation hearing of AW regarding the Banamex funds was that:

“The funds concerned were not, and are not, held by MacDuff (or anyone else) as nominee for White or (to the best of White’s knowledge) Gangar.”

[55]Mr Justice Langstaff, however, considered the funds to be a realisable asset of SSG and AW. AW appealed in respect of this part of the judgment. In the advice on appeal prepared on his behalf it was again asserted that the sum was not a realisable asset of AW. Permission to appeal was refused.

[56]Written requests made of Mexican lawyers by AW’s solicitors in 2013 had no other purpose than to establish that the Banamex funds were not realisable, a posture wholly in defiance of the court order, and the failure of the appeal, and entirely inimical to the realisation of the assets. In a letter directly from AW to Banamex dated 7 June 2011 AW stated:

“I am not the beneficiary to the funds and have no idea of their whereabouts or indeed their destination at the time of their transfers. To avoid me being sent to prison I need to demonstrate that these funds had no connection with me…”

(emphasis added)

[57]In an undated email from AW to McDuff AW stated:

“You may or may not be aware that Shin [SSG] and I were given a Confiscation Order by the Court which is effectively assets that the Court deem that we have at our disposal. Quite ridiculous so we have to fight it to the bitter end… [I believe] that you have commenced litigation against the bank to recover these funds? I am not seeking to collect the [funds] but just to show that they are still there and that we have no rights to them… If you would prefer to chat it over at some stage before you provide anything please let me know.”

[emphasis added]

[58]An authority executed on 15 November 2002 purported to permit McDuff or an individual, Mr Arciga, to act on behalf of SCC.

[59]Mr Arciga did attend Banamex in December 2003, but it appears that at that time there was a freeze on the account due to an investigation taking place in relation to an individual in Utah. Victoria Avilez was also a director of SCC.

[60]Letters were sent to Mr Arciga and Ms Avilez on 11 March 2014 by AW’s solicitors. The letters were apparently only translated into Spanish through google rather than through an actual interpreter. Other individuals who might have authority (Edgar Gaeta Villanueva, Roberto Leopold Cruz Balbuena Jose Arturo Gutierrez Hernandez) have not been contacted nor does any attempt appear to have been made to do so.

[61]As regards the role of the liquidators and trustee in bankruptcy, Mr Mark Wilson of Baker Tilly indicated in a letter dated 30 May 2013 that the Banamex funds had been recovered by the US Receiver of the Vavasseur Corporation and exhibited an order appointing Mr Roy Terry receiver over a number of assets including the Banamex account in 2005. He later recognised that Mr Terry had not collected the Banamex funds.

[62]On the contrary, in an email dated 18 June 2013 to Baker Tilly, Roy Terry’s attorney stated that Mr Terry made no claim on the funds at that time.

[63]At least until June 2013, therefore, Mr Wilson had understood Roy Terry to have collected the funds but Roy Terry then made no claim in relation to them. Mr Wilson recently suggested that Roy Terry was best placed to recover the sums. In the most recent correspondence from Roy Terry, however, he indicated that he was not optimistic about the prospects of realisation.

[64]The attitude of both SSG and AW on this matter is that each may sit supinely on his hands and let Mr Terry (if indeed he is the liquidator best placed to pursue the Banamex funds) to realise the assets in question. Given the apparent pessimism of Mr Terry on that score, it is submitted that this Court should accept that it is impossible for either SSG or AW to realise the Banamex funds. However, I do not accept that the appointment of a liquidator or trustee in bankruptcy absolves SSG or AW from discharging their individual responsibilities for realising assets that the Crown Court has specifically identified to be their joint property. As already explained, the efforts of SSG and AW have so far been exclusively directed to gain support for their posture that the Banamex funds are not their joint property. Their conduct towards the liquidators has been informed by the self same posture. For example, AW’s solicitors wrote to Baker Tilly to say:

“We are and have always been instructed by our client that these monies [viz the Banamex funds] are NOT available to him”

[65]In an e-mail of 1 November 2013 Mr Terry requested:

“I am not sure who has the best claims to such funds because I am not clear on how the funds were transferred to Banamex. Any information you have would be most welcomed.”

[66]No response was forthcoming to assist Mr Terry.

[67]On 14 July 2014 Mr Wilson wrote that he did not know where SCC had been registered and that there were two companies with that name, one registered in Belize and one in the US. He asked AW’s solicitors to ask AW if he knew where SCC had been incorporated.

[68]Mr Wilson further requested:

“If [AW] is able or willing to provide a witness statement showing that Secured Clearing Corporation was a sham and was in fact a front for either DWC or Vavasseur and/or was willing to provide a witness statement to state the funds held in the Banamex Account were held on trust for either DWC, Mr Gangar, Mr White and/or Vavasseur, I will be happy to liaise with you to see how that could best be used to realise the funds in the Banamex Account through the offices of the US Receiver.”

[69]The response spoke volumes about AW’s attitude:

“Our client does not have first-hand knowledge as to which jurisdiction Secured Clearing Corporation as holder of the Banamex account, was incorporated. He does however believe from the documentation that has already been provided to you, that it is likely to have been incorporated in the Belize. We enclose a few of the documents which lead to this belief…”

[70]The enclosed documents were a list of corporate officers and ownership [sic] and an agreement for services between SCC and DW.

[71]However, in an e-mail produced by AW, he said:

“Secured Clearing Corporation” • This company was incorporated in Belize and is still live. • This is the company that had the account with Banamex. • There was another company registered in Texas of the same name but this was for the “Cash Management” agreement that had been arranged. • This company was never used by DWC. • It was liquidated in 2003.”

[72]Regarding Mr Wilson’s second question (i.e whether SCC was a sham and beneficial ownership of the funds), the response on behalf of AW stated:

“Our client’s position is not that Secured Clearing Corporation was a sham or a front for Dobb White & Co – but that Dobb White & Co had a Service Agreement with Secured Clearing Corporation.”

[73]The response provided no particulars as to the beneficial interest in the monies. There were nonetheless several instances in which the information provided by McDuff made clear that the funds in the Banamex account were indisputably Dobb White (and only Dobb White) funds, and that SCC held those funds as “fiduciary” for the real beneficiary.

[74]In my view, to permit, on this material, SSG and AW successfully to contend that the Banamex funds cannot be realised by them would make a mockery of the applicable legislation. No real effort has been made to realise the funds. The core message sent to the bank, to the liquidator and to others, is that neither SSG, AW or Dobb White has a beneficial interest in the funds, and that none of them is seeking to make a legal claim to the funds. In my judgment, the language of the Court in R (on the application of Craig Matthew Johnson) v Birmingham Magistrates Court

[2012] EWHC 596

could not be more apt to describe the posture of SSG and AW: “The claimant’s stance has been that once the Enforcement Receiver was appointed it was up to the Enforcement Receiver and anything the Crown could do way by way [sic[ of addition in their pursuit of letters of request to recover what they could. He was shut up in prison serving a very substantial sentence. What more could he do but sign those letters that he was asked by the Receiver? It is important that the claimant be disabused of the notion that that is a sufficient attitude to adopt to avoid a warrant for committal. It was his obligation to realise those assets within the time set by the judge in the confiscation order, lest he face imprisonment in default.” (paragraphs 24-25) “In my view, the co-operation on which the claimant relies and of which the Receiver spoke was merely colourable; a cloak to his real approach as evidenced by his conversation with the Receiver and his attitude throughout that he was not going to strain to realise assets, but rather, having received what he must have regarded as a favourable order, to hope that he could subsequently persuade someone to accept they were not or were no longer his assets.” (paragraph 29)

[75]I should also add that if Baker Tilly did recover the Banamex funds, they would either pay the same to the Magistrates’ Court (crediting the defendants’ confiscation orders) and then recover the monies from the Magistrates’ Court for distribution amongst creditors, or would alternatively distribute the monies directly amongst creditors.

[76]In any event SSG and AW would suffer no prejudice. Payments of £8,451.66 and £23,664.64 (for each of SCG and AW) from the account of SCC with Banamex.

[77]At the time of the confiscation hearing, each of the defendants claimed that these payments had nothing to do with them.

[78]In the present application AW has again asserted that these payments had nothing to do with him. In 2002 AW was given authority by McDuff to make enquiries with Banamex as regards transactions on the SCC account. AW accepted that he had not sought to use that authority. A document produced by SSG, apparently for the Court of Belgium, stated that SSG and AW were kept aware of the activity in the account on a daily basis.

[79]SSG’s evidence, contained within his application for a certificate of inadequacy, was to the effect that these were profit payments to SCC. He was unable to explain this absurdity in his oral evidence.

[80]Neither SSG nor AW has produced any evidence at the confiscation hearing or subsequently as to what became of these realisable assets, or any evidence that the assets are not realisable. Antigua £19,000 in respect of 1 Pillar Rock, Antigua

[81]Again, this asset was the subject of extensive consideration at the hearing before me. Mr Justice Langstaff, having considered the evidence held as follows: “I find that [AW] or [SSG], between them, had….. agreed to buy the property from Hunt [an associate] who appears to have owned it. There was payment or, at the very least, substantial part payment of the purchase price. This, in English law, …. would be sufficient to make Hunt a constructive trustee of the property for [SSG] and [AW]. They, therefore, have an interest in it. That interest is to be valued on the evidence at £45,000. I do not think that there will be any great difficulty in realising it, particularly if [SSG] and [AW] repeat the evidence that they gave to me, which, in this case, was supported by such inferences as were properly drawn from the documents. It is realisable by both jointly.” (Transcript, 55B-59D).

[82]The realisable asset of £19,000 is held by a law firm in Antigua, Clement Bird. The position following the confiscation orders is accurately stated in a letter of 16 July 2014 from Baker Tilly: “Clement Bird advised the former Trustee in 2005 that Pillar Rock was owned by Rock Holdings Limited (“Rock Holdings”) with the shares of this company held by nominee companies. No evidence or documentations was forthcoming from your client to contradict Clement Bird’s position or to assist the Trustee to prove the ownership of Rock Holdings and as a result, the proceeds of sale of Pillar Rock.”[emphais added]

[83]No direct information was provided by either SSG or AW to explain to Clement Bird how they purchased the property from Hunt. Far from providing such information, efforts again have been concentrated on asserting that they have no beneficial interest in the property, in defiance of the confiscation orders and in breach of their responsibilities to realise the asset. For example. AW’s solicitors on 1 July 2011 asserted to Clement Bird:

“There is no attempt by Mr White or indeed ourselves to undermine [sic] any foreign jurisdiction or indeed your integrity merely to establish that the monies are not due to Mr White and never have been and to understand the process that has gone on which led to the sale and the establishment of the beneficial rights within your jurisdiction.”

[emphasis added]

[84]Under cross-examination in this Court AW did not unequivocally accept that he did hold a beneficial interest in the proceeds of sale of Pillar Rock. Such an interest was simply what the evidence showed.

[85]On the evidence I hold that neither SSG or AW has made any genuine and determined attempt to realise the asset in question. I am on the contrary entirely satisfied that SSG and AW are in a position where they could provide further particulars of the kind referred to in Baker Tilly’s letter of 16 July 2014, with a view to explaining to Clement Bird the full circumstances in which they acquired their beneficial ownership of 1Pillar Rock, the exact basis upon which they enjoy an entitlement to the funds in the hands of Clement Bird, and the great importance of realising that asset in fulfilment of their obligations under confiscation orders of the English court. Payment to Buiteman Holdings of £52,612 and to Interaccountant Consultant Fact of £27,853.65, payment from Albaned acocunt of £16,903.62; balances of £2,523.33 and £2,924.01 standing to the credit of Coggia accounts.

[86]On 29 May 2002 a payment of €170,000 (£105,224.90) was made to Buiteman Holdings from an account in the name of Coggia II. On 24 October 2002 a payment of €90,000 (£55,707.30) was made to Interaccountant Consultant Fact from the same account. The account was controlled by Jan Kaart and Daniel Levine, but utilised by SSG and AW. At the confiscation hearing, it was asserted that the only payments relating to Dobb White were those that appeared on AW’s reconciliations. It was argued that these accounts were not used exclusively for the benefit of Dobb White.

[87]Mr Justice Langstaff dealt with the arguments relating to payments from the Coggia account and also an account held by Albaned. He noted that:

“[The Crown] point to the fact that Mr White did not, on every occasion, make a faithful record of every payment and that on this occasion, he did, in drawing his own account, state an opening balance on the Coggia account which had no obvious derivation…… There was an occasion when he mentioned that there would be no entry because of a desire to treat a matter as a private transaction.”

[88]The judge noted that the payment to Buiteman Holdings had been made on 29 May 2002. The payment to Interaccountant Consultant Fact was made on 24 October 2002 (i.e. the day after the police raid on the homes of SSG and AW). SSG had said in evidence that the reason they had asserted Dobb White had control over the Coggia account was that Jan Kaart would do whatever they asked. The judge considered that these were Dobb White funds and was not satisfied that the funds were no longer realisable by SSG and AW.

[89]AW unsuccessfully sought permission to appeal in relation to these payments and that from the Albaned account.

[90]The attempts to recover these sums have largely consisted of attempts to locate Jaan Kaart. The ruling by the Court in Antwerp in relation to money laundering charges against Daniel Levine confirmed that Levine was not only a signatory to the Albaned account, but, in the view of that Court, was the person who had caused a large number of the transactions on that account to take place.

[91]SSG stated that he had been able to make some form of contact with Daniel Levine through Iain McWhirter. He asserted that he had asked McWhirter for the details and McWhirter had refused to give them to him. McWhirter’s oral evidence on this point changed. Initially, he said that SSG had not asked him for contact details for Levine. He later stated that he “would have wanted to protect” Daniel Levine. I am not able to rely on his evidence on this matter.

[92]The attempts to contact Kaart were made by way of internet searches by his solicitors. The internet searches carried out by his solicitors were only for persons with the surname Kaart in Holland and Belgium. But AW had information about Kaart that he did not disclose to his solicitors, and that he made no attempt to use. He knew that Kaart had a residence in the South of France and he had visited this residence.

[93]AW’s solicitors did speak to Daniel Levine. The record of that call was in the following terms:

“MF explained the workings of the Coggia/Rabo Bank account – the payments out to places such as Buiteman Holdings; the fact we simply need assistance in him clarifying that these payments were not related to Alan White or shedding light on whom Buiteman Holdings actually are to get confirmation from the same etc.”

[emphasis added]

[94]That note went on to say:

“* Coggia/Rabo Bank, Buiteman Holdings, inter-account Consultant Dexia/Albaned – MF took the opportunity to see if Levine himself could shed light on any of the above – as expected, he had never heard of any of them.”

[emphasis added]

[95]Levine had been convicted of money-laundering in relation to the Albaned account at Dexia. His dishonesty to AW’s solicitor would have been patently obvious to AW, who confirmed in his evidence that he had read the note. Nonetheless, AW appears to have made no attempt to carry the matter further. No records of any further attempts to speak to Levine were recorded.

[96]No genuine effort has been made to realise these assets. Instead the focus again has been on gathering support for the position rejected by Mr Justice Langstaff at the confiscation hearing, namely, that neither SSG nor AW has any connection with the assets in question. This is apparent from the following material in particular.

[97]In a letter dated 7 June 2011 from AW to “Coggia Bank” regarding the Coggia account he said:

“I am not the beneficiary to the funds and have no idea of their whereabouts or indeed their destination at the time of their transfers. To avoid me being sent to prison I need to demonstrate that these funds had no connection with me and would therefore be grateful if you could provide the following information…”

(emphasis added)

[98]In a letter dated 5 November 2012 from AW’s solicitors to Rabobank it was said:

“Our client’s position is that he has never received the aforementioned balance nor is he entitled to the same. Unless we can prove that the balance on this account did not transfer to our client, our client is facing a lengthy custodial sentence; hence the importance of our enquiries.”

(emphasis added)

[99]In a further letter from AW’s solicitors to Buiteman Holdings it is said:

“It is our client’s position that that this money is not available to him, nor does he have any connection to the money or Buiteman Holdings. Please therefore be assured that our client makes no claim to this money but simply seeks to prove that it is not his.”

(emphasis added)

[100]In a further email from AW’s solicitors to Buiteman Holdings it is said:

“and to try and prove that our client was not involved with Buiteman Holding or these monies in any way ”

(emphasis added)

[101]In a proforma letter from AW’s solicitors to a number of individuals with the name “Kaart ” it is said:

“From this account were various outgoing payments unconnected with ourclient and actioned by Mr Kaart. Unfortunately, the Court found that these outgoing payments were available to our client yet our client has no knowledge of the recipients. We there require Mr Kaart’s assistance to confirm that these payments were directed by himself and have no connection to our client. Please therefore be assured that our client makes no claim to these outgoing monies but simply seeks to prove that they were not connected to him”

(emphasis added)

[102]In a letter from AW’s solicitors to Dexia it is said:

“Our client’s position is that he never received the aforementioned payment, however unless we can prove that the payment of $50,000 did not transfer to our client, our client is facing a lengthy custodial sentence.”

[103]Again, to allow, on this material, SSG and AW to succeed in their contention that they cannot realise the relevant assets would make a mockery of the applicable legislation. The thrust of their posture has remained that they have no connection with the assets and have no claim on them. Payments to Jade Valley Associates Ltd (“JVA”)

[104]A sum of £10,000 was paid by Martin to JVA on 29 April 2005. This payment was made long after the imposition of the freezing order, the bankruptcy orders and the liquidation of DW. At the confiscation hearing SSG asserted that the payment was not connected to him; AW asserted that the payment related to an enterprise, Tower House Associates Ltd. Langstaff J. rejected these assertions and held that the payments were, in effect, payments to SSG and AW respectively.

[105]Neither SSG nor AW put forward before me any fresh evidence on this matter, but simply asserted that Langstaff J. had been wrong to conclude as he did. There is no reliable evidence that the monies were in fact paid to Tower House Associates, and there is no evidence as to what happened to the monies even if they could be shown to have been paid to Tower House Associates. AW’s wife and his brother were directors of JVA. AW had the full opportunity at the hearing before Langstaff J. to call witnesses, and to provide supporting documentation, to show that JVA paid the monies to Tower House Associates, to demonstrate that Tower House Associates applied the monies for its own purposes and that he retained no control over, or beneficial interest, in them. That opportunity was not taken, and the attempt before me to undermine the finding of Langstaff J was simply an abuse of process. Cash payments from ACT Management Ltd (“ACT”)

[106]On 25 October 2002 £50,000 was withdrawn from ACT by way of a cheque to cash. On 28 October 2002 £5,000 was withdrawn in the same way; and on 20 December 2002, a cheque for £26,000 was drawn in favour of an unknown person.

[107]As to SSG’s position, see paragraph 110 below.

[108]Before Langstaff J AW asserted that these payments were exclusively for the benefit of SSG and his family. That assertion was rejected, and permission to appeal to the Court of Appeal on this point was refused. Before me SSG asserted that the payments were not connected with AW. However, first, I am not able to accept any assertion put forward by SSG unless it is supported by compelling corroborating evidence, of which there is none. Secondly, there is no adequate explanation of why SSG failed to put before Langstaff J the assertion that he made to me. I must also be very careful in this context that SSG and AW do not between them manipulate the liabilities imposed on them by the confiscation orders, so as to achieve a result that they might perceive better to promote their collective interests. They were partners in a colossal fraud, and I have no idea what mutually beneficial strategies they might have in mind to pursue in relation to the confiscation orders.

[109]There is simply no evidence before me that SSG and AW cannot realise these assets. Assets attributed to SSG The Woodlands

[110]The Woodlands was SSG’s family home. The property was purchased with money provided by Dobb White clients. It was sold on 23 August to Orvale Ltd, which had been incorporated on 3 July 2002. Sychar Stiftung, a vehicle of SSG, owned Orvale. The mortgage on the property was paid by another company, Palmgrove, again from funds provided by Dobb White clients. SSG was, through the use of the Sychar Stiftung seeking to conceal this asset from creditors or any other party who might make legal claims against SSG.

[111]On 30 April 2003 the shares in Orvale Ltd were transferred to an individual, Naser Ahmad, for no consideration. The transfer was in flagrant violation of the freezing order. Naser Ahmad then “sold” the property to Rhys Frampton, the son of Debbie Faulkner, who arranged mortgages for SSG, for the sum of £775,000. After the “sale” SSG and his family continued to live in the property and remained there until July 2004.

[112]At the confiscation hearing, SSG asserted that Naser Ahmad had threatened SSG and his family, and that SSG had transferred the property to him in order to protect himself and his family.

[113]The Court heard evidence regarding the alleged threats and the circumstances surrounding the transfer to Naser Ahmad. Mr Justice Langstaff considered that the transfer to Mr Ahmad “reeks of collusion”. The money from the sale had been paid to a Swiss bank account in the name of Ahmad’s brother, Shakeel Ahmad, and disbursed from there. The payments from Shakeel Ahmad’s account did not appear to be to any creditors of the scheme. Langstaff J did not accept SSG’s evidence regarding threats made to him and considered that Nasser Ahmed was most likely to be a nominee of SSG’s, or alternatively a resulting trustee, and that the sum of £775,000 was a realisable asset. If he was neither a nominee nor trustee, then the monies constituted a gift which it was appropriate to take into account.

[114]The single

judge refused permission to appeal on this point, noting that:

“[The Judge] gave full reasons for rejecting the applicant’s case on Woodlands. There may have been complaints to the police; but the Judge’s overall finding (not undermined by the non-disclosure point) was one open to him.”

[115]SSG put before this Court a statement (prepared by him) and signed by his son, giving details of the alleged threats and the unsigned statement (also prepared by SSG) of Paula Gangar, again referring to alleged threats.

[116]An accountant used by both SSG and AW, Ian Collins, gave oral evidence in this Court. He said that he had been pressured by “thugs” to transfer the shares in Orvale Ltd to Naser Ahmed. The written statements put forward by SSG’s son and Paula Gangar could have been adduced at the confiscation hearing. Similarly, Collins could have given oral evidence at that hearing. No adequate explanation was provided for those failures, and on the authorities the material is simply inadmissible in these proceedings.

[117]In any event I can place no reliance on statements prepared by SSG purporting to emanate from proposed witnesses. It would be an under statement to say that I have no confidence whatsoever that the statements genuinely represent what those persons believe to be true, and the proposed witnesses could not be tested in cross-examination. As to Ian Collins, I did not find him a reliable witness. It was he who proposed to SSG and AW that entities in Liechtenstein would be an effective means of sheltering assets (such as the family home) from prospective creditors, and he was instrumental in setting up the entities employed by SSG and AW. His account of “thugs” was unconvincing. He had not reported the alleged thuggery, and effective criminal extortion of a highly valuable asset, to the police. He could not adequately explain how he had contrived to transfer the shares in Orvale Ltd, owned by the Sychar Stiftung, to Naser Ahmed, without the active involvement of any person with due authority to act on behalf of the Stiftung nor did he offer any explanation of how SSG was allowed to continue to live in The Woodlands for a substantial period after the alleged “thugs” had, on his account, contrived criminally to extort the beneficial ownership of the property.

[118]In short, the position regarding The Woodlands remains precisely as it was found to be by Langstaff J. and I note only that SSG has made no attempt since the imposition of the confiscation order even to contact Ahmad. Payments to Ian Hamilton

[119]Before Mr Justice Langstaff SSG asserted that these were owing to Ian Hamilton as an “introducer”. SSG did not at the confiscation hearing offer any witness, or provide any documentation, to support this assertion. The judge rejected the assertion as unsupported and not credible. At the hearing before me Ian Hamilton gave oral evidence. There was no adequate explanation of why he had not been called as a witness at the confiscation hearing, and the evidence that he gave to the Court could readily have been given at that time. It was, therefore, simply inadmissible.

[120]In any event Ian Hamilton provided no documentary support for his assertion that he had earned the payments as an “introducer”, and gave no satisfactory explanation of how he came to receive what appeared to be three separate payments for “introducing” a single client. For those reasons, even if his evidence were admissible, the position is not materially different from that at the time of the confiscation hearing. Payments of £6,300 to Kamla Banga (SSG’s niece) and £900 to Surinder Purwar

[121]At the confiscation hearing SSG asserted that these payments of £7,000 and £1,000 respectively were repayments to creditors of Dobb White. The documentary evidence did not support the amounts claimed, and neither payee appears on Baker Tilly’s list of Dobb White creditors. Neither Banga nor Purwar gave evidence at the confiscation hearing. Langstaff J. rejected SSG’s assertions, but reduced the amounts by 10 per cent (to £6,300 and £900 respectively) on the basis that part of the money might have been used for family expenses.

[122]In the present proceedings SSG produced “statements” from Banga and Purwar. The “statements” had been drafted by SSG. I am not prepared to accept these “statements” as genuine evidence. The “statements” referred incorrectly to amounts of £6,300 and £900, tailored to coincide with Langstaff J’s reduction of the original sums. Neither Banga nor Purwar gave oral evidence. In any event SSG could have put forward all this material at the confiscation hearing, and the failure to do so was not adequately explained. Payments to Steve Porter and Terratruck.

[123]On 19 July 2002 ACT Management paid £1500 to Porter and on 13 August 2002 paid him a further £4502. A further £19,976 was paid to Terratruck, from the proceeds of sale of 139 and 141 Station Road.

[124]The material put before me on this matter was entirely unsatisfactory. SSG had initially asserted that the payments of £19,976 had been written off against a debt of £140,000 owing to Terratruck. SSG drafted a statement for Porter, the final version of which referred to this alleged debt. However, neither Porter nor Terratruck appeared on Baker Tilly’s list of Dobb White creditors, and there was no documentary evidence to support the assertions of a genuine debt. At the hearing in this Court the position became more obscure. SSG said for the first time that the payment of £19,976 related to a subsequent separate loan of £20,000. No document was produced to support this new version, and initially Porter in his oral evidence appeared unaware of such a loan. Furthermore, although SSG asserted that the two smaller payments (£1,500 and £4,502) related to Terratruck, Porter had no clue as to how they came to be made.

[125]It is plain that this material is wholly inadequate to justify any interference with Langstaff J.’s confiscation order. In any event it is also clear that all of this material, unsatisfactory though it may be, could have been produced at the confiscation hearing, and there is no adequate explanation for that failure. Payments to Balderson and Hudyma.

[126]From the proceeds of sale of 139 and 141 Station Road, a payment of £31,397 was made to Jack Balderson and a payment of £31,397 was made to Andrew Hudyma. Hudyma said that a sum of $100,000 was made from Dobb White to his company, Timecraft Ltd. That amount was then paid back to Dobb White, and subsequently placed in two accounts with Singer & Friedland, nominally linked to Balderson. The funds were finally remitted to a destination directed by SSG. Langstaff J. held that Balderson and Hudyma were close associates of SSG and that the amounts in question were realisable assets of SSG.

[127]Nothing has occurred since the confiscation hearing to justify a certificate of inadequacy in respect of that property. Payments to/through “Pop” Gangar

[128]At the time of the confiscation hearing SSG said that a number of payments to “Pop” Gangar were in respect of “distribution investment or introducer” fees. Payments to Horton House Associates and payments of £75,000 to Michelle Ganger and £74,000 to ACT Management Ltd were client payments or family expenses.

[129]Mr Justice Langstaff concluded that these were largely sums that had passed through the accounts of “Pop”, to other destinations of SSG’s and AW’s choosing,

[130]In his oral evidence in this Court SSG said that he and “Pop” Gangar would decide where the monies should go and that £3,000 per month would be paid to “Pop”. “Pop” said in oral evidence that he could not say whether family members had been paid and that he did not know who was on the list of payees. He could not recall signing the larger ACT cheques which were attributed to both SSG and AW.

[131]“Pop” Gangar said that he had received some sums, and that there had been some discussion about where the sums should be paid. He stated that he had continued to work for DW after its liquidation, principally by driving SSG to meetings and doing whatever SSG would ask him. “Pop” Gangar clearly knew that he was disposing of assets after SSG was made bankrupt and DW was in liquidation.

[132]“Pop” Gangar could, of course, have given evidence at the confiscation hearing. He could have said at that stage everything that he told this Court. There is no adequate explanation for that failure, and his evidence is simply inadmissible on the present application.

[133]In any event, in my view, the material now put forward entirely misses the point. Langstaff J. concluded that “Pop” Gangar was in effect SSG’s pawn, who made payments from Dobb White funds at SSG’s direction and to destinations designated by SSG. The evidence that I heard simply confirmed that that was the case. The final destination of the funds is not known to the authorities, but was known, and is most likely to remain known, to SSG. However, SSG chooses to remain silent, and to provide no assistance whatsoever in identifying where the Dobb White funds have gone. SSG’s stance is that he and “Pop” Gangar are no longer on amicable terms and that “Pop” Gangar will not “repay” the sums received by him. This stance is risible. Save to a limited extent, recognised by Langstaff J., “Pop” Gangar was not the ultimate beneficiary of the funds in question. He was a mere conduit, and any putative refusal on his part to “repay” large sums transmitted through his agency can provide no basis for a certificate of inadequacy. Payments of £140,000 to Affleck and Fitch

[134]At the confiscation hearing SSG asserted that the sum of £100,000 paid to Affleck and Fitch was in order to pay creditor thugs. He asserted that an additional £40,000 payment related to expenses regarding Gurrow Point, a property purchase.

[135]Mr Justice Langstaff noted that SSG and AW had given differing accounts regarding these payments. AW asserted that the £100,000 related to a bridging loan. The judge was not satisfied that the money was reimbursement of a bridging loan, nor that the payments related to payments made by Affleck and Fitch to thugs. He considered that the asset was a realisable asset of SSG’s.

[136]As to the payment of £40,000, Mr Justice Langstaff considered that Affleck and Fitch were nominees of SSG for the purposes of that money. He described them as “men of straw” who were presented by SSG as men of substance. He considered that there was no obvious reason for them to receive the sum of £40,000 and considered it to be a gift from the proceeds of Birkdale Close. He considered that both payments were taken by Affleck and Fitch as nominees of SSG.

[137]On SSG’s application for permission to appeal, the single

Judge considered that:

“I also think, in all circumstances, that the Judge was entitled to conclude, for the reasons he gave, that Affleck and Fitch were straw men.”

[138]The point regarding both these payments was again raised on behalf of SSG before the Court of Appeal. Again, the argument was unsuccessful.

[139]In support of this application for a certificate of inadequacy, SSG produced a “statement” (apparently drafted by SSG) signed by Mr David Affleck. No evidence was produced from Mr Fitch.

[140]The “statement” asserted that Mr Affleck and his clients lost monies in the scheme and that the entire sum of £140,000 (rather than just the £100,000 asserted SSG at the time of the confiscation hearing) was used to pay violent people in 2004/2005. The “statement” also asserted that Mr Affleck has since been declared bankrupt, although his name does not appear on the bankruptcy register.

[141]Affleck did not attend this Court pursuant to a witness summons. I reject his “statement” entirely, for the same reason that I have rejected other “statements” prepared by SSG for intended witnesses. In any event, the statement could have been produced at the confiscation hearing, and the failure is unexplained. Payments to and through Rhys Roberts

[142]A payment of £10,000 was made by SSG to Rhys Roberts, his brother-in-law. At the confiscation hearing SSG asserted that this had been for family expenses. Langstaff J. rejected this assertion, save as to £2,000.

[143]In his oral evidence to this Court, Mr Roberts said that SSG had used two of his accounts as his own and that he (Mr Roberts) had simply signed cheques as asked.

[144]Roberts could have given this evidence at the confiscation hearing, and the failure is unexplained. In any event, the evidence takes the matter no further. SSG chooses to remain silent as to the ultimate destination of the monies in question, and there is no justification for disturbing the conclusion of Langstaff J. that the monies are realisable assets of SSG, or for doubting that SSG can realise the assets in question. Payments of £9,000 and £10,000 to Parade Consultancy

[145]David Taylor made a statement and gave oral evidence on this application. He said that he controlled a bank account of Parade Consultancy and operated the account under instructions of SSG.

[146]Taylor could have given this evidence at the confiscation hearing; the failure to do so is unexplained and the evidence is inadmissible. In any event, the evidence takes the matter no further. It remains wholly unclear where the monies have gone at the direction of SSG, and the conclusion of Langstaff J. that these monies are realisable property of SSG remains unaffected. There is no reliable support for SSG’s assertion that he cannot realise these assets. Payments to Racks Agency, JK Setrim and Rose Transfere Ltd

[147]At the time of the confiscation hearing, SSG asserted that each of these payments was to a creditor client. SSG asserted to this Court that payments were made for the benefit of Mr Sharma, who has since died. At the time of the confiscation hearing SSG did not assert that these payments were to Mr Sharma. Mr Sharma does not, in any event, appear on Baker Tilly’s list of creditors.

[148]Camilla Sharma gave evidence in this Court regarding these payments. Her father was friends with SSG and she remains close to him. Her evidence was confused. She appeared to believe that her father may have invested monies with the entities in question, rather than directing SSG to pay money to them for his benefit. She was not able to produce any documentation to show that the entities were linked to Mr Sharma, and there was no evidence to indicate what became of the monies in question. Mr Sharma could have given evidence at the confiscation hearing, and in any event the material now relied on takes the matter no further. Payment to PS Bradley

[149]SSG has made no attempt to explain what happened to the money transferred to Bradley. In my view, it is a reasonable inference that Bradley, like other individuals and entities associated with SSG, was a mere conduit for the transfer of funds to SSG or for his benefit. The asset remains part of SSG’s realisable property on that basis. The fact that Bradley has himself now apparently been made subject to a confiscation order is, therefore, irrelevant. In any event, by reason of section 9(1) and (2) of the Proceeds of Crime Act 2002, the amount in question would not form part of Bradley’s available amount, being an amount payable in pursuance of a prior obligation arising from an order of a court “made on conviction of an offence” before the time of Bradley’s confiscation order. Even if, quod non, the property ceased to be realisable on the ground that SSG could not recover it from Bradley, there is no legal impediment as such to its recovery from Bradley. Payment of £92,000 re Palm Two Investments

[150]On 1 August 2005 Richard Martin paid monies to Tasiopoulos in respect of a potential investment. SSG acquired £92,000 as a result of that transaction. SSG did not account for that money, but asserted at the confiscation hearing that the funds “had been lost” in 2005. Langstaff J. rejected that assertion, and held that SSG had simply stolen £92,000 of the funds advanced by Mr Mertin. These funds remain unaccounted for. In this Court SSG produced a statement from Tasiopoulos (prepared by SSG) to the effect that Tasiopoulos would not “repay” the £92,000 in question. As SSG had received the £92,000 from Tasiopoulos, that was not surprising, but it is of no assistance whatsoever on this application. Sychar Stiftung

[151]I deal below with this asset in the context of Birkdale Stiftung Assets attributed solely to AW Birkdale Stiftung (“Birkdale”)

[152]This Stiftung, or foundation, was established in Leichenstein. It is now established that AW was the beneficial owner of Birkdale, although he was not prepared to admit that that was the case until conclusive documentary material emerged. Ian Collins was instrumental in establishing Birkdale, and the purpose was to enable AW to conceal the ownership of important assets that might otherwise be taken by creditors or by others having a legal right to them. SSG had a parallel arrangement, the Sychar Stiftung, also established by Collins for the same purpose. The controlling figure in Leichtenstein was a notary, Agnes Schuter.

[153]One asset controlled by Birkdale was Tamfer Enterprises Ltd (“Tamfer”). One director of Tamfer was Eric Paul Barnes. No enquiries were made of Barnes until very recently, and the enquiries were then carried out by Collins. It was suggested that Barnes was a nominee director and had had no further dealings with Tamfer. However, Collins in oral evidence said that he had had a signature stamp for Barnes, and appeared to sign documents for him. On the last day of the hearing an e-mail was disclosed indicating that Collins had been asked to forward an authority to Barnes. Noone (including Collins himself) had referred to this request in evidence, and the matter could no longer be explored.

[154]There was evidence that Agnes Schuter had died some time after the confiscation hearing, and a suggestion that her son might have acquired her estate including (it was further suggested) Birkdale and Sychar. Collins in his evidence said that he believed that information regarding the two stiflungs could probably be obtained in Leichtenstein.

[155]In my view, neither AW nor SSG has made a determined effort to ascertain the up-to-date position of the stiftungs, and to take the requisite steps to seek to realise the assets held by Birkdale and Sychar, or at least to identify what might have happened to such assets. Such efforts as have been made have been piecemeal, disjointed and unlikely to yield effective results. The death of Agnes Schuler has occurred since the imposition of the confiscation orders, and I take account of that event. Nonetheless I am far from persuaded, on the material presented to me, that even with the exercise of due and focussed diligence the property attributable to Birkdale and Sychar cannot be realised. In my view neither SSG nor AW has made any determined focussed effort to seek to ascertain the present position of the Stiftungs that each set up for the purposes explained, or to realise the property in question. Cheque withdrawals from AW’s first direct account

[156]At the time of the confiscation hearing AW asserted that these were not available to him and had either been used for expenses, or may have matched credits to accounts held by SSG. Before me it was argued that the cheques had not been disclosed to AW and that this failure should be taken into account. AW’s application for permission to appeal also relied upon non-disclosure. It was unsuccessful on that ground.

[157]As to the cheques, Richard Gould of the SFO gave evidence that the SFO did not routinely seek copies of all cheques and then choose which ones to use in evidence. Although the SFO would obtain authority to see all the cheques they would only request copies of those that seemed relevant to the investigation. He had asked members of the case team, who had confirmed that they did not have in their possession the cheques sought by AW.

[158]In my view AW could himself have sought copies of the cheques before the confiscation order. This issue has already been thoroughly ventilated in previous proceedings, and it provides no basis for a certificate of inadequacy. Withdrawals from Milestone Ltd

[159]At the time of the confiscation hearing AW asserted that these payments related to a cashcard scheme and were not realisable assets. Mr Justice Langstaff did not accept this explanation and found the sums to be realisable. AW appealed in respect of these payments and was unsuccessful.

[160]AW now simply repeats his previous assertions. No new evidence or information has been provided as to what became of the sums. Items 6, 57, 59, 115 – 118 – Cash withdrawals from AW’s account and from companies.

[161]In respect of a number of cash withdrawals attributed to AW, he asserted at the confiscation hearing that these had been used for living expenses, business expenses or to pay creditors and possibly to fund SSG’s family members. AW now asserts that these payments were used to repay creditors.

[162]No new information has been provided as to what became of these payments. Payments totalling £21,000 to PAS

[163]At the time of the confiscation hearing AW asserted that Ian Collins had utilised the “rental” payments for Birkdale Close, AW’s home, for his own purposes.

[164]In writing to Ian Collins on 2 May 2011, AW did not seek to recover the sums allegedly stolen by Collins. The thrust of his letter was to obtain assistance in showing that the funds in Birkdale were not realisable and to trace a Mr Raj Basu, from whom AW considered he might be able to obtain some money. AW offered to split any recovery with Collins, itself a transaction that would have been in breach of the restraint order. AW did not provide the liquidator/trustee in bankruptcy with details of any claim against Mr Basu.

[165]In his statement prepared in 2013 Ian Collins asserted that the sums would have been paid out by “financial contra”. This evidence could, of course, have been given at the confiscation hearing. In any event Collins was not able to give details of which companies would have been paid the sums out, or to where. He had no documentation to support any of those assertions.

[166]There was no good reason for the sums claimed to be “rent” to be paid to PAS Ltd, as opposed to directly to Tamfer Enterprises Ltd or to the Stiftung. It is unclear what Ian Collins ultimately did with the funds paid to him by AW, or whether the “financial contra” was in fact to another investment held on behalf of AW. AW has, therefore, failed to provide any details as to what has become of the sums in question, and has failed to show that he could realise these assets.

The position generally

[167]AW’s known assets are his share of the Banamex fund (£233,555.45); proceeds of sale of Pillar Rock (£9,500); and 50 per cent of the property at Rosedale Road (initially valued at £61,250). Accordingly, of the total confiscation order of £686,996.81, AW has hidden assets of at least £382,691.36.

[168]SSG’s known assets are his share of the Banamex monies (£233,555.45) and the proceeds of sale of Pillar Rock (£9,500). Accordingly SSG has hidden assets of at least £2,046,910.58.

[169]This Court has no real idea where these assets might be, or what these assets may well have earned since the confiscation order. SSG and AW are professionals, well versed in money management and in the art of maximising investment opportunities. The hidden assets in each case are very substantial, and are plainly capable in skilled hands of generating large returns over a significant period. AW misses the point entirely when he laments that the Banamex funds (part of the known assets) have produced no income, and claims that he would not be able to pay the interest that has been ascribed under the legislation to these funds. The Court would simply be at risk of being seriously duped if it accepted such a plea, remaining in ignorance, as it does, by the deliberate choice of AW as to where the hidden assets are and what profit they might have generated. The Court must bear in mind that these are men who have lied and cheated on a grand scale.

[170]In SSG’s case the position is even more alarming, and the risk of the Court being duped is, in my view, overwhelming. Just before the hearing before me SSG produced bank statements. In excess of £106,000 had been paid into SSG’s bank account. This was said to have been provided by an individual, “Simon Locke”, who resided outside this jurisdiction. It was said that the amounts were a “loan”. There was no document to support that assertion and “Simon Locke” did not appear before me.

[171]The substantial amounts received were not of course applied to reduce SSG’s liability under the confiscation order. They have been spent to support a comfortable lifestyle for himself, his new solicitor wife and his children. No humble abode for this large scale convicted fraudster: only a 4-bedroom family house at a rental of over £2000 per month would be good enough. Many of the payments out of the account have been disbursed on obviously non-essential items of choice, and even regular charitable payments from these funds have been made to the Holy Trinity Church, Brompton, no doubt impressing the (I hope, unwitting) beneficiary of this largesse with SSG’s generosity and spiritual values – entirely in dereliction of his duty to apply resources towards discharge of the liability imposed by the Court.

Conclusion

[172]There is no merit in either application. Each is dismissed. I should only add that at the outset Ms Sheena Cassidy for the SFO submitted that much of the material advanced by the applicant was not, on good authority, admissible. I did not rule at that stage, preferring to wait to see what parts of the evidence might be admissible. Ms Cassidy has been largely vindicated in her initial submissions, and I have indicated in this judgment where evidence was inadmissible, even if I have from an abundance of caution also considered it on its merits.