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Let’s turn to crime

Posted on 1st October 2019 by Chris Makin

Looking back at the blogs on this site, as well as the many articles I have written for law magazines, it is striking what a range has been covered.  In expert work we have had how to use an expert, how to understand business accounts, how to hold an expert meeting, partnership matters (including possible disputes in your own firms) and accreditation of accountant expert witnesses, to name but a few.  And in mediation we have covered the basic concept, boundary disputes, what’s magic about the process, probate disputes, and why you don’t need a specialist mediator.

It’s quite a wide range, but there are two gaps.  One is in family law, where I advise on family businesses, increasingly as SJE.  I need to fill that gap soon.  The other is criminal law, so Welcome to My Criminal World!

It started about 30 years ago.  I had cut my teeth on lots of bitty jobs, and had given expert evidence in a week-long trial at the RCJ, acting for a stuntman injured on a Superman film.  With that, I was hooked.

Then came Barlow Clowes.  This was the first of the big Ponzi schemes, where investors’ money had been squandered on Porsches, Bentleys, vineyards, corporate raiding, office blocks, a brewery, the Spa at Scarborough, and even on buying a yacht from Christina Onassis.  When the company collapsed, £150million was missing.  Where had it gone?

The SFO had their ideas, and produced funds flow statements.  A vast amount of evidence was served on me, acting as expert for the defence of the chairman, and I had to set up a factory of six forensic experts to go through the evidence in a structured way.  My report took 8 months and filled 43 ringbinders, and I was told I would be at trial in London for 18 months, giving evidence for many weeks.  Then, the very day before the trial, the SFO agreed my report and I was excused attending the trial.

My client was found not guilty on all charges.  By contrast the MD, Peter Clowes (not my client), was jailed for 10 years and disqualified as a company director for the maximum of 15 years.  As Burnside might have said, that was a result!

There were other experiences.  I helped to defend a drug trafficker accused of importing £100million of cannabis by light aircraft from the Dutch/German border.  Interviewing him in Strangeways, I saw that his position was hopeless, and he was jailed for 25 years with another 10 if he did not pay his confiscation amount.  That was not a result – at least, not for the defence!

Another notable case was the Rotherham Mouldy Chicken scandal, where managers at a rendering plant were picking dead chickens off a huge pile in the yard, taking them to a secret factory at Barbot Hall, cutting off the purple bits, dipping the cuts in baths of acid and brine, shrink wrapping what remained, and selling it to butchers across the country.  A highlight was a raid we did on the factory to seize records, attended by armed police, and we helped South Yorkshire Police to secure seven convictions of up to 7½ years.

Then there was the professor who had been accused by his students of fiddling his expenses on a foreign field trip. This would have been a disaster for the university, since he had already been booked for a high profile programme on BBC1. I reviewed records where every penny was accounted for. So why the accusations?  I discovered that the instigator was a lecturer who had been disciplined by the professor; this lecturer had the job of finding work experience places which were essential to the students’ ratings, and he forced the students to complain.  So it was the lecturer who was sacked, not the professor.  Phew!

Let’s come down to earth.  I have often been called on to help in the defence of sub-postmasters accused of falsifying their returns and creaming off cash, or pub and club managers doing similar things.  The position revealed by my work is usually that a crime has been committed, but not on anything the scale contended.

Two examples.  In one, a middle-aged lady looked after an elderly couple, and gradually went through their savings and spent it on bingo and holidays in Australia and Goa.  The cash, of course, had all been spent.  I went carefully through the records, and found that the cash diverted was about £20,000 rather that the £53,000 of which she had been accused.  She was facing a sentence of about 4 years.  Then came the plea bargaining, and our counsel said that my work had reduced the 4 year sentence to only 15 months.

In another, the manager at a care home for adults with learning difficulties had been going to the hole in the wall and taking out spending money for them, but keeping some for herself.  Although the prosecution evidence was of low quality – this is often the case – my opinion was that only a little less than the contended amount was unaccounted for.

Then there are confiscation proceedings.  Where a person has been found guilty of a crime – it used to be drugs, gun running and the sort, but now the category is much wider – proceedings are pursued to take away the benefits of the crime.  The rules are harsh; for example, if a wholesaler of drugs is convicted, his benefit may be taken as the ultimate street prices of the drugs.  And if two or more are engaged in a joint venture, each is held to have benefited by the total street price.  My task for the defence is to demonstrate that the benefit is less than contended, on the civil burden of proof.

But again, the prosecution’s evidence tends to be of poor quality – in a recent case, I was against a part qualified accounting technician, and I have been a chartered accountant for 50 years! – so it was relatively easy to reduce the amount to be confiscated.  In another, the Met’s financial investigation unit asserted that the benefit derived from a crime was £1.3million, whereas I demonstrated that virtually of this disgraced solicitor’s income had come from legal aid; the confiscation was reduced to a mere £30,000.  And it is remarkable how often the amount the prosecution is claiming is exactly the total of the convict’s wealth!

Why am I telling you all this?  Not as an ego trip, or not to show how exciting is the work of a forensic accountant – it is, but I don’t want all of you doing my job!  No, the reason is that a person accused of a crime has a right to a fair trial, and for that there should be something of equality of arms.  But for my work, the first lady above would have been serving a much longer sentence than necessary, and the professor would have been sacked.  And but for the work of my team, the chairman of Barlow Clowes would have faced a very long time in jail.

So personal injury, fatal accidents, business interruption, family business valuations, and many kinds of mediation are fascinating, but I also feel that there is good work to be done in the murky world of crime.

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Chris Makin

By Chris Makin

Chris is a chartered accountant with over 30 years experience as a forensic accountant and expert witness, and 20 years as a mediator and expert determiner.

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