Government of the United States of America v Tollman
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moses,Mr Justice Ouseley |
| Judgment Date | 07 February 2008 |
| Neutral Citation | [2008] EWHC 184 (Admin) |
| Docket Number | Case No: CO/5772/2007 AND CO/4714/2007 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 07 February 2008 |
[2008] EWHC 184 (Admin)
Lord Justice Moses
Mr Justice Ouseley
Case No: CO/5772/2007 AND CO/4714/2007
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Alun Jones QC and John Hardy (instructed by The Crown Prosecution Service) for the United States Government
Edward Fitzgerald QC and Hugo Keith (instructed by Simmons and Simmons) for Mr Tollman
James Lewis QC and James Hines (instructed by Simmons and Simmons) for Mrs Tollman
Hearing dates: 20 th November – 23rd November 2007
Introduction
This is the judgment of the Court. The caesura between the two appeals and the concision of the latter indicates the contribution of Ouseley J. This is the second occasion that the extradition of Mr and Mrs Tollman to the United States has occupied the Divisional Court for three days. Since the decision of this court on 6 September 2006 R (Government of the United States of America) v Bow Street Magistrates Court [2006] EWHC 2256 (Admin) [2007] 1 WLR 1157 there have been five further hearings before the Senior District Judge, making a total of eighteen hearings. We exclude from that computation a case management hearing on 19 October 2006 and hearings during the course of which the Senior District Judge gave his judgment. The full history leading to the previous decision of this court on 6 September 2006 is set out in the judgment of Lord Phillips CJ. The culmination of the subsequent hearings has been two decisions. On 29 May 2007 the Senior District Judge concluded, pursuant to s.91 of the Extradition Act 2003 (the 2003 Act) that he should order the discharge of Mrs Tollman. On 28 June 2007 he concluded that by virtue of the passage of time it would be unjust and oppressive for Mr Tollman to be extradited and he was discharged in relation to each of the offences of which he has been accused in the United States, pursuant to s.79(3) of the Act. The Government of the United States of America now appeals against both those decisions pursuant to s.105 of the 2003 Act.
In the previous decision of this court Lord Phillips CJ emphasised that one of the objects of the 2003 Act was to ensure expedition (see paragraphs 73, 79 and 80). He stressed the obligation of the parties and those acting for them to co-operate to ensure that objective is achieved (see paragraph 79). The observations of the Lord Chief Justice have had no effect. Even now, the United States Government is faced with yet further proceedings by which Mr and Mrs Tollman propose to resist their extradition. It is unnerving to recall what Thomas LJ said on a renewed application for judicial review by the US Government (the proceedings which led to the decision of this court on 6 September 2006) as long ago as 6 June 2006:-
“The course taken in this case has been defended by none of the parties before us. Why it has come about is not a matter for this court on this application to determine, but plainly the way in which this case has proceeded gives rise to concerns in the way in which cases should be dealt with, so that the extradition process can be determined within a time that is infinitely more expeditious that what has so far happened with this case. In this case, as Mr and Mrs Tollman are in their seventies, it is particularly unjust that so little has been achieved over such a protracted period of time.”
The stance taken by the parties since those observations is one of studied intransigence. Neither side has proved other than obdurate in fighting its corner. This uncompromising approach to the litigation is conducive neither to an expeditious, still less a rational, disposal of the issues.
Although the Senior District Judge discharged Mrs Tollman first, pursuant to s.91 of the 2003 Act, it is convenient to deal with the appeal in relation to Mr Tollman first.
The Senior District Judge's decision to discharge Mr Tollman was made pursuant to s.79(1)(c) and s.82 of the 2003 Act. The relevant part of s.79(1) provides:-
“If the judge is required to proceed under this section he must decide whether the person's extradition to the Category 2 territory is barred by reason of –
(c) the passage of time;
(3) if the judge decides any of the questions in sub-section (1) in the affirmative he must order the person's discharge.”
S.82 provides:-
“A person's extradition to a Category 2 territory is barred by reason of the passage of time if (and only if) it appears that it would be unjust or oppressive to extradite him by reason of the passage of time since he is alleged to have committed the extradition offence…”
The judge set out a helpful chronology:-
“1978 The defendant and a Mr Hundley set up Tollman-Hundley hotels
1987 & 1989 The company negotiated loans with 5 banks
1989 The company purchases Days Inn of America
1990 The company defaults on its servicing of the financial loans that had been raised owing to a sudden downturn in business in the hotel industry
Sept 1991 An “earn-out” agreement is finalised
Sept 1992 Credit repayment agreement finalised
1991 – 1993 It is alleged that false representations were made by the conspirators to the First National Bank and the National Westminster Bank
1993 & 1994 Allegedly false statements and representations were made by the conspirators to the Marine Midland Bank and to the Chemical Bank
1993–1996 A number of allegedly false representations were made by the conspirators to the Bank of America
1996 The United States investigation commences
Nov 2000 Mr and Mrs Tollman's application for Swiss residency was approved
2001 They move to live primarily in Switzerland but with frequent visits to New York
Between 3 rd & Mr and Mrs Tollman visit New York
7 th Apr 2002
17 th April 2002 Mr Tollman was indicted by a Grand Jury, together with others, with offences of defrauding the banks, making false statements to financial institutions and tax evasion
24 th April 2002 Arraignment hearing which Mr Tollman does not attend
July & Nov 2002 Superseding indictments were returned by the Grand Jury
Jan 2003 The complaint against Mrs Beatrice Tollman alleging tax fraud was laid
18 th March 2003 A request was made for the extradition of Mr Tollman under the 1989 Act
19 th April 2004 Extradition request withdrawn
6 th Aug 2004 Request for a provisional warrant received
17 th Aug 2004 Stanley Tollman is arrested
Oct 2004 Formal extradition request received
19 th & 20 th May Abuse of process argument at Bow Street 2005 Magistrates' Court
6 th Jun 2005 Disclosure ordered
7 th Feb 2006 United States government apply for judicial review
6 th Sep 2006 Administrative Court sets aside orders for disclosure and remits the case to the City of Westminster Magistrates' Court”
We should comment at this stage on what we regard as a significant omission from this chronology. Between 2003–2004 four of Mr Tollman's co-accused were tried for and convicted of the conspiracy for which Mr Tollman was indicted and due to be arraigned in April 2002. They were the co-founder of Tollman-Hundley, Hundley, sentenced to eight years' imprisonment, their General Counsel, Freedman (probation) and their Chief Financial Officer, Cutler, imprisoned but now released and their Finance Vice President, Zukerman, sentenced to 18 months' imprisonment.
The Allegations
Mr Stanley Tollman was born in South Africa in 1930. There he built up a successful hotel and restaurant business. He married Beatrice Lurie in 1954. In the mid-1970s he moved to England but between 1978 and 1989, when he was involved with a hotel business in the United States, he lived there more frequently. His sons went to university there and his wife acquired a farm. He had, with Mr Hundley, and advised by Mr Housmann, who died in April 1997, set up Tollman-Hundley Hotels in 197In 1989 Tollman-Hundley borrowed large sums of money by way of syndicated loans from the banks, alleged to be victims of fraud, in order to buy Days Inn of America Inc., which franchised Days Inn Hotels. The debt was guaranteed personally by Mr Tollman and by Mr Hundley.
There were difficulties in servicing this debt, culminating in restructuring by means of a Creditors' Repayment Agreement in 1992. A number of hotels were repossessed. In order to make good the estimated shortfall between the value of repossessed hotels and the total value of the original loans, Mr Tollman and Hundley were required to supply “Deficiency Notes”.
At the heart of the bank fraud lies the allegation that Mr Tollman and Mr Hundley, with their associates, conspired to defraud the banks so as to have the loans written off by re-purchasing the debts through straw entities, controlled by Tollman and Mr Hundley.
The third superseding indictment returned by a Grand Jury on 29 April 2003 was based on these allegations. Count 1 alleges a single conspiracy which, in this jurisdiction, would be regarded as a number of conspiracies with separate criminal objectives: bank fraud, false statements to a financial institution, mail fraud and a conspiracy to defraud the Internal Revenue Service by concealing the taxable events of cancellation of the debts sold by the banks.
For the purposes of this count, it is alleged that Mr Tollman and Mr Hundley and others conspired to defraud United States banks by creating the false impression of inability to pay their debts. For this purpose they defaulted on various debts to financial institutions and concealed improvements in their financial circumstances, particularly following their...
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