R v Alibhai
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore |
| Judgment Date | 30 March 2004 |
| Neutral Citation | [2004] EWCA Crim 681 |
| Court | Court of Appeal (Criminal Division) |
| Docket Number | Case Nos: 2002 05006 C2: 2002 05007 C2: 2002 05011 C2: 2002 05012 C2 |
| Date | 30 March 2004 |
[2004] EWCA Crim 681
Lord Justice Longmore
Mr Justice Silber
Mr Justice Andrew Smith
Case Nos: 2002 05006 C2: 2002 05007 C2: 2002 05011 C2: 2002 05012 C2
IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT READING
(Hon Mr Justice Jack)
Royal Courts of Justice
Strand,
London, WC2A 2LL
MICHAEL BIRNBAUM Esq QC and SAILESH MEHTA Esq for the Appellants Alibhai and Bakir
MARK GADSDEN Esq for the Appellant Collier
JAMES KIRBY Esq for the Appellant Dias
SIMON MEHIGAN Esq QC who did not appear below
MICHAEL HICK Esq and JAMES NORMAN Esq for the Crown
Introduction
This is an appeal arising from a 156-day trial in front of Mr Justice Jack and a jury in which the appellants were convicted of a criminal conspiracy to deal dishonestly in counterfeit Microsoft products. The appellants Alibhai and Bakir were alleged to be the principal parties from whom others took their instructions. As principals they were sentenced to four-and-a-half years' imprisonment. The defendants Collier and Dias were alleged to have performed minor roles and were sentenced to terms of four months' imprisonment and have since been released.
They have all been granted leave to appeal by the single judge on what we will call broadly grounds of inadequate disclosure, but he refused leave to appeal in relation to other grounds. We have ourselves given leave to argue three other grounds of appeal but the principal arguments on the appeal related to disclosure. It will be necessary to set out the background as shortly as we may.
Prosecution Case
The prosecution case was that between 5th November 1997 and 20th July 2000, the appellants Alibhai and Bakir were at the heart of a conspiracy to deal in counterfeit Microsoft compact discs and licences within the United Kingdom. They were directors of PC Software Ltd ("PCS") which was based at the Barn in Gerrards Cross. They acquired the counterfeit product either in the UK or through imports from the USA and elsewhere. The counterfeit product was sold using a number of companies run by Alibhai and Bakir and other defendants. The profits generated were laundered and returned in cash to the two main defendants.
The main categories of the evidence against the appellants were:-
(1) theft of certificates of authenticity later used to authenticate counterfeit discs traded by the appellants (it was not suggested that any appellant was involved in the thefts themselves);
(2) evidence of the seizure of large quantities of counterfeit Windows 97 discs from two storage facilities, The Nestings in Bracknell and Reading Self Storage, at the turn of the year 1998/1999;
(3) money and product movement between companies controlled by or associated with the defendants, showing that money was laundered through the sham transactions between them;
(4) evidence of a trader, Alex Bell, who ran a company called Power Peripheral and whose brother Jonathan ran a limited company called Peripheral Brokers. According to Alex Bell Alibhai offered to sell him and indeed sold him substantial quantities of counterfeit discs in late 1998;
(5) evidence from traders down the supply chain to show that companies which were controlled by the defendants had supplied them with counterfeit product;
(6) interceptions of product leaving the Barn en route from PCS to customers between October 1999 and April 2000; four out of 10 intercepted consignments were found to contain counterfeit products;
(7) evidence of a co-defendant, Peter Eliot, who accepted that he set up bogus companies and laundered money for the defendants; he claimed that he was unaware of the wider nature of the conspiracy and that he had never himself supplied any product to Alibhai and Bakir;
(8) evidence of Dan McGrath, an American customer of Alibhai and Bakir. He was called to give evidence as a co-conspirator. The prosecution relied upon his evidence of dealings with Alibhai and Bakir and on covert tape recordings of his conversations with them in June and July 2000, made after McGrath's arrest in Dallas on 16th June 2000.
The first phase of the conspiracy started in about September 1998 and ended in about December 1998. In early 1998, using the false identify of "Peter Matthews", Peter Eliot (who was, in the event, acquitted by the jury) set up a company called PM Metals at the behest of Alibhai and Bakir. PM Metals purported to sell PCS software to the value of over £356,000. PCS was the true source of this software, which was counterfeit. PCS used a company called Oracle Trading Worldwide, which the third appellant Adam Collier purported to run, as a front for supplying counterfeit software to other dealers. Steve Cooke (acquitted at the end of the prosecution case) was a broker for Oracle, who sold counterfeit goods to various customers. Money therefore flowed back from Oracle's customers to Oracle to PCS and eventually to PM Metals. It was returned to Alibhai and Bakir in cash by Eliot.
The second phase started in about December 1998 and ended in late April 1999, when Eliot went to Canada. In this phase, a company called Essential Options (trading as Precision Multi Media or "PMM") was the purported supplier. Peter Eliot ran PMM as well as PM Metals. He set it up using the false identity of "Clive Greager". A company called Wayfarer Ltd, run by the fourth appellant Nathan Dias, purported to buy software from Essential Options and paid over £941,758 to Essential Options. Wayfarer then purported to sell this software to a company called Lothbury Ltd. This company, run by the appellant Collier, replaced Oracle. In this phase of the conspiracy, PCS had dropped out of the picture as a named supplier, although Alibhai and Bakir and PCS were in fact continuing to control the distribution of the counterfeit software. Lothbury purported to sell the counterfeit product to customers. The money therefore went from Lothbury's customers to Lothbury, to Wayfarer to Essential Options/PMM. Eliot passed most of the money from the Essential Options account back to Alibhai and Bakir in cash.
The third phase began in about April or May 1999. Eliot had disappeared, possibly with some of Alibhai and Bakir's money. For a short period, in May and June 1999, Nathan Dias did the money laundering which Eliot had been doing. He took cash directly out of Wayfarer. In June and July 1999, a company called Trice took over the role that Essential Options had played. Trice was replaced by a company called JC Ravandi between July and October 1999.
In April 1999 Dan McGrath, who traded from Austin, Texas, flew to the UK to meet Alibhai and Bakir. They decided to do business. PCS sold counterfeit product to McGrath, between April 1999 and June 2000. On 16th June 2000, McGrath was caught by the FBI with a large quantity of counterfeit Microsoft licences in Dallas. He quickly admitted his guilt and told the FBI the licences came from Alibhai and Bakir. He agreed with the FBI to act as an informant. Telephone conversations with Bakir were taped as were meetings with Alibhai and Bakir in July 2000. It was alleged that during recorded conversations in England Bakir offered large amounts of counterfeit product to McGrath. Alibhai and Bakir were arrested on 19th June 2000 in central London in the course of handing over counterfeit material to McGrath.
The counterfeit Microsoft products in which the appellants allegedly dealt were computer discs ("CDs"), key codes unique to CDs or sets of CDs, certificates of authenticity ("COAs"), Multiple Licence Packs ("MLPs"), End User Licence Agreements ("EULAs"), and "Original Equipment Manufacturer" CDs ("OEMs") which are CDs bundled with their own PCs and sold by large companies with the authority of Microsoft.
The defence case
It is convenient to deal first with the case of Eliot. His general defence was that he laundered money for Alibhai and Bakir and never supplied any goods (genuine or counterfeit) to anyone. He had acquired the two companies PM Metals and Essential Options and had set up their bank accounts on the instructions of Alibhai. Alibhai gave him identity documents which he had used to open the PM Metals account. A friend of Alibhai, called Fez, provided a Portuguese passport in the name of Greager. Alibhai had asked him to set up PM Metals in early 1998 so that he (Eliot) could research some software companies in the North. After a loss on currency transactions instigated by Alibhai, Alibhai told Eliot that the money lost was not his; his partners would "come after" him (Alibhai) and they were not nice people. Alibhai said that they (his partners) would also "come after" Eliot and his family. Thereafter Eliot was in fear of Alibhai and his partners. He said that Alibhai (who had the cheque books) gave him cheques, first from PM Metals and later from Essential Options. Alibhai would tell him the details of the relevant invoices to be made out. Eliot would have the invoices typed by a secretarial service. He returned the proceeds in cash to the defendants, usually to Bakir. Eliot said he was paid £80 per day for his services. He also retained (subject to expenses) a relatively small sum of money on each transaction, being the difference between the amount of the cheque and the amount returned. He had thought Alibhai and Bakir might have been involved in a VAT fraud, not a software fraud. Had he known the discs were counterfeit he would have refused to get involved.
When he started using the Essential Options account, Alibhai introduced him to Dias who instructed him how the new invoices were to be made...
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