R (MK (Iran)) v Secretary of State for the Home Department
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE FOSKETT,Mr Justice Foskett,MR JUSTICE CRANSTON |
| Judgment Date | 28 June 2010 |
| Neutral Citation | [2008] EWHC 3452 (Admin),[2009] EWHC 2673 (Admin),[2009] EWHC 1960 (Admin) |
| Date | 28 June 2010 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/8588/2007,CO/7345/2008,Case No: CO/7345/2008 |
[2009] EWHC 1960 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Foskett
Case No: CO/7345/2008
Anthony Peto QC and Tom Weisselberg (instructed by SOCA) for the Applicant
Clare Montgomery QC and Daniel Lightman (instructed by Asserson Law Offices) for the Respondents
Hearing dates: 8 th & 9 th July 2009
Introduction
This case raises issues about the extent and use of the powers of the Serious Organised Crime Agency ('SOCA') to obtain a “disclosure order” under Part 8 of the Proceeds of Crime Act 2002 (“the Act”) for the purposes of a “civil recovery investigation” under section 341(2) of that Act. Such an investigation is an investigation into (a) whether property is recoverable property or associated property within the terms of the Act, (b) who holds the property, or (c) its extent or whereabouts.
On 8 August 2008 SOCA sought and obtained ex parte on the papers from His Honour Judge Kay QC, in his capacity as a High Court Judge, a disclosure order against the Respondents pursuant to section 357 of the Act. In due course, “information notices” pursuant to the authority conferred by this order were issued by the Director of SOCA addressed to the First, Third and Fourth Respondents.
In these proceedings the Respondents seek to set aside the disclosure order and the information notices. They say that there was no jurisdiction to make the order or, if there was, the court's discretion should not have been exercised in favour of making the order. They also say that the order was obtained following material non-disclosure by SOCA and should, therefore, be discharged. It is contended that the information notices should, accordingly, fall if the order falls.
The primary submission is that the Court has no jurisdiction to make a disclosure order where SOCA seeks such an order for the purpose of issuing “information notices” to persons who are not present, resident or domiciled in England and Wales and, accordingly, the “appropriate officer” has no power under the authority of a disclosure order to issue “information notices” to persons who are not present, resident or domiciled in England and Wales.
The background
These proceedings arise out of a major, well-publicised and, to a degree, controversial criminal trial in Israel which, after six years of hearings, culminated in October 2007 in the conviction of the First Respondent, Mr Israel Perry, by the Tel Aviv-Jaffa District Court of serious offences of dishonesty. The consequential proceedings concluded on 5 February this year when Mr Perry's appeal against his convictions was dismissed by the Israeli Supreme Court, although his sentence of 12 years imprisonment was reduced to 10 years. In March Mr Perry filed a petition seeking a further hearing in the Israeli Supreme Court. The legal process in Israel may, therefore, not yet be concluded. It has been submitted that I should be slow to assume that the scheme to which I will refer in greater detail below “can ever form a proper basis for a claim to be brought by SOCA.” It seems to me plain that I have to deal with matters as they stand: Mr Perry stands convicted of significant offences by the Israeli courts arising from that scheme. Should the convictions be set aside then the situation may alter.
Mr Perry was a well-known Attorney in Israel. He is, I am told, of dual Israeli and Polish nationality. The Second, Third and Fourth Respondents (respectively, 'Mrs Perry', 'Mrs Greenspoon' and 'Miss Perry') are Mr Perry's wife and two daughters. All three are of Israeli nationality and are currently resident in Israel.
Mr Perry's criminal conduct, according to the laws of Israel, arose out of a scheme he established in 1983 which was named the 'Organization for the Implementation of the Social Security Treaty (Israel-West Germany)'. The purpose of the scheme was to enable Israeli nationals to take advantage of an international treaty made between Israel and what was then the Federal Republic of Germany (West Germany). The Treaty gave citizens of Israel who qualified the opportunity to obtain pensions from the Federal Republic of Germany by making a one-off payment to the German Social Security Agency ('the BFA'). The Federal Republic of Germany entered into parallel treaties with several other countries. I am told that the one-off payment was calculated so as to represent the equivalent of monthly pension contributions between 1956 and 1980. The Treaty permitted registration for the German Pension until a deadline of 12 June 1983.
The arrangements concerning the pension scheme were not without difficulty. One problem was that the pensioners were only eligible to receive a German pension during their own lifetimes and, accordingly, those who paid the significant lump sum faced the risk that, if they were to die before receiving payments equal to or greater than their lump sum and the cost of funding it, their participation in the scheme would result in a net loss for them. The pension scheme established by Mr Perry was, it is said, designed to overcome the obstacles and risks faced by those Israeli citizens who wished to take advantage of the BFA offer. As a result of advertising and marketing of the pension scheme about 30,000 Israeli citizens registered to apply for the BFA offer before the deadline.
I have been told that the pension scheme set up by Mr Perry was operated primarily by two companies, BG Assistance Limited (“BGA”) and BG Finance Limited (“BGF”), both of which are registered in the Isle of Man. BGA and BGF were ultimately owned by BG Organisation Limited (“BGO”), a corporation registered in Liechtenstein, which in turn was ultimately owned by a Trust, the beneficiaries of which were certain members of the Perry family.
The precise details of the way the scheme operated are complex. However, it offered a financing option to those would-be participants who would have been unable or unwilling to fund the initial payments themselves. There were two approaches available: for those who were willing and able to fund the initial payment required to take up the BFA Offer, the scheme charged only legal and administrative fees (the 'handling fees') for the services it provided; for those who were unable or unwilling to fund the payments themselves, the scheme offered a loan sufficient to cover all costs, including the initial payment to the BFA, administrative fees and insurance premiums. I am told that the scheme assumed all of the risks associated with the transaction thus enabling acceptance of the offer without any financial risk and without breaching the prohibition imposed by the Israeli Foreign Currency Comptroller (who regarded the offer unattractive and would not grant a permit to Israeli citizens to send foreign currency out of Israel to take advantage of it.)
In order to cover the risk that a participant who took out one of the loans would die before the receipts from the BFA were sufficient to repay the loan, the scheme charged additional sums (“premiums”) calculated by reference to the cost of life insurance on the participants' lives.
It appears that the arrangements made in respect of the life insurance premiums lies at the heart of the criminality found to have been established by the Israeli courts. The background is complex and I do not think it necessary to say more than the barest minimum for present purposes. Much of the material put before me on the background has been put forward on Mr Perry's behalf and, accordingly, the full picture may not have emerged. However, in a nutshell, some part of the life insurance arrangements involved payment of premiums to an insurance company, Britannia Guarantee National Insurance Limited (“Britannia”), set up and registered in the Cayman Islands which was ultimately owned by Mr Perry.I am told that the Tel Aviv-Jaffa District Court held that all insurance premiums should have been paid to an independent third party insurance company and since Britannia was owned by Mr. Perry, insurance premiums paid or payable to that company were adjudged to have been “stolen”.
In his first witness statement in these proceedings Mr Trevor Asserson, an English Solicitor in practice in Jerusalem who is Mr Perry's solicitor in this matter, said this:
“Within some 3 months of opening his Pension Scheme to the public, Mr Perry was able to sign up 30,000 people of whom nearly 14,000 eventually went on to become pensioners under the Pension Scheme. Of those, some 4,000 people were self financing, and so did not need life insurance.”
Mr Perry continues to challenge the conclusion of the Israeli courts, contending that the life insurance element of the scheme was legitimate and gave rise to no benefit to him. He also asserts in the proceedings before me that the Israeli courts have not concluded that all sums that he received by virtue of his involvement in the scheme were obtained dishonestly: those courts did not, it is said, find him guilty of any offences in respect of the handling and legal fees charged (see paragraph 10 above) or where money was made from the interest rate margins between the German interest rates at which his companies borrowed money from a German bank, Berliner Handels und Frankfurter Bank ('BHF') – rates which generally declined during the relevant period – and the fixed rate charged on the loans to the...
To continue reading
Request your trial
-
R Tony Michael Jimenez v The First Tier Tribunal (Tax Chamber) (First Respondent) HM Commissioners for Revenue and Customs (Second Respondent)
...to a pension scheme), his wife and two daughters. None of them were British nationals (see paragraph 6 of the judgment of Foskett J [2010] 1 WLR 910). Their nationality is not mentioned in the judgments of the Supreme Court. The main reasoning is given by Lord Phillips who said: The DO app......
-
National Crime Agency v Gediminas Simkus and Others
...746, especially at [56], [57], [62] and [64]. 32 Foskett J at first instance in Serious and Organised Crime Agency v. Perry and others [2010] 1 WLR 910 at paragraphs 83 and 84 said this:- 83 If one compares the procedures adopted in respect of other orders that potentially intrude significa......