R v German Castillo
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LAWS |
| Judgment Date | 13 December 2011 |
| Neutral Citation | [2011] EWCA Crim 3173 |
| Docket Number | No: 2011/2959/D1 |
| Court | Court of Appeal (Criminal Division) |
| Date | 13 December 2011 |
[2011] EWCA Crim 3173
IN THE COURT OF APPEAL CRIMINAL DIVISION
Royal Courts of Justice
Strand
London, WC2A 2LL
Lord Justice Laws
Mr Justice Owen
Mr Justice Haddon-Cave
No: 2011/2959/D1
Mr J Fisher QC appeared on behalf of the Appellant
Mr J Waddington appeared on behalf of the Crown
On 16th July 2009 before His Honour Judge Higgins at the Southwark Crown Court this appellant was convicted by a unanimous jury of an offence of conspiracy to cheat the public revenue. On 20th July 2009 he was sentenced to 10 years' imprisonment. The 291 days spent on remand were ordered to count towards sentence. He was disqualified under section 2 of the Company Directors Disqualification Act 1986 for 10 years.
On 9th May 2011 Judge Higgins made a confiscation order against the appellant in the sum of £3 million pursuant to the relevant terms of the Criminal Justice Act 1988 (as amended) to be paid within 12 months or 10 years' imprisonment consecutive in default.
There were two co-defendants who were convicted of the same offence and both sentenced to six-and-a-half years' imprisonment. A £10,000 confiscation order was made in respect of Denise Westmoreland and £40,000 in respect of Jonathon Baigent. The appellant now appeals by leave of the single judge against a 10 year default term of imprisonment attached to the confiscation order.
The conspiracy in question was a massive enterprise which ran between May 2001 and August 2003. It was what is called a carousel or missing trader fraud. It involved an artificial and dishonest trade in mobile phones purchased VAT free in other Member States of the European Union, engineered so as to facilitate the making of entirely bogus claims for the refund of millions of pounds worth of Value Added Tax from the Customs. The estimated loss to the Exchequer was over £250 million. The conspiracy was brought to book through a major investigation called Operation Euripus.
The investigation led to 45 arrests; 96 sets of premises were searched; 260 computers and 500,000 documents were seized. Invoices and banking documents showed that 42 United Kingdom VAT registered companies—these were the so-called missing traders—were used to buy telephones VAT free from other companies registered for VAT in the Republic of Ireland, Holland, France, Finland and Spain. 529 trading chains were identified. They all highlighted the artificial nature of the transactions. In particular they showed that in about half of the examples there was a circular trading pattern and in all the examples there was a missing trader which did not account for the relevant VAT.
The appellant lived in Barcelona. He was the director of a number of European Union suppliers and was signatory to those companies' bank accounts. A substantial part of the stolen VAT—over £300 million—went through his company bank accounts. He played a pivotal role in the conspiracy and in the laundering of its proceeds. The turnover of his companies during the period covered by the investigation amounted in all to just under £383 million. The VAT element in relation to the transactions was about £58 million. Funds were transferred from London accounts to sister accounts in Spain in the total of £1,900,000-odd. He was also involved in about 268 transactions which took place over a two year period. The Crown submitted, unsurprisingly perhaps, that he was at the centre of the fraud.
In the confiscation proceedings against the appellant the benefit figure was agreed at £30,791,277.25. The Crown contended that the appellant's minimum profit from the conspiracy was £4 million. The appellant, who gave evidence in the confiscation proceedings, asserted that it was only £2 million. But that was a bare assertion. The judge (see the confiscation proceedings transcript, page 7B to C) accepted the Crown's figure. The appellant sought to persuade the judge that he had dissipated the funds he had obtained from the conspiracy. He claimed he had spent the money on a woman for whom he had formed a deep attachment, on cocaine and prostitutes, generally on high living and also on the purchase of a property as regards which on the judge's finding (12C of the transcript) he had made mortgage payments to the tune of €240,000. The judge found that save for the mortgage payments the appellant's account of his expenditure was fanciful (page 11C).
The Crown accepted that in arriving at the figure for realisable assets the judge should make some deduction from the £4 million to reflect expenditure which could not be recovered. It was submitted that 25 per cent or £1 million was a reasonable figure. The judge was satisfied that the appellant's minimum profit was £4 million and that there were available hidden assets in the sum of £3 million (transcript 17C). That then was the amount of the confiscation order, as we have indicated.
The judge heard submissions on time to pay and on the appropriate sentence in default. As regards the default sentence, the judge concluded as follows:
"Throughout these proceedings the defendant's approach has been, for all material purposes, wholly untruthful and it is plain to me that the present purpose of his untruthfulness is to preserve his remaining criminal assets of at least £3 million so that he may enjoy them on his release. The legislation is designed to prevent that and I intend to implement the intention of Parliament.
Accordingly, in...
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...a period of imprisonment in default of payment of a confiscation order. Mostly recently the threads were drawn together by this court in R v Castillo [2012] 2 Cr App R(S) 36. Laws LJ said at paragraph 12 of the judgment that the following principles emerged from the authorities: "1. All the......
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