R v Tuegel
| Jurisdiction | England & Wales |
| Judge | The VICE PRESIDENT |
| Judgment Date | 19 November 1999 |
| Judgment citation (vLex) | [1999] EWCA Crim J1119-24 |
| Docket Number | No: 9805121/Y3-9805432/Y3-9897025/Y3-9807026/Y3-9807027/Y3 |
| Court | Court of Appeal (Criminal Division) |
| Date | 19 November 1999 |
[1999] EWCA Crim J1119-24
The Vice President
(Lord Justice Rose)
Mr Justice Tucker
and
Mr Justice Elias
No: 9805121/Y3-9805432/Y3-9897025/Y3-9807026/Y3-9807027/Y3
IN THE COURT OF APPEAL CRIMINAL DIVISION
Royal Courts of Justice
The Strand
London WC2
MR J ROBERTS QC & MR M PICTON appeared on behalf of theAppellant TUEGEL
MR N PASCOE QC & MR F SHERIDAN appeared on behalf of the Appellant SAIA
MR N FORD QC appeared on behalf of the Appellant MARTENS
MR F GILBERT QC & MR A OLDLAND appeared on behalf of the Crown
Friday 19th November 1999
On 13th February 1998, at Bristol Crown Court, the appellant Martens pleaded guilty to two counts of conspiracy to defraud on counts 3 and 4 in the indictment and one count of obtaining property by deception on count 6. On 27th July 1998, following a trial which lasted more than 5 months, before Langley J, at the same court, the appellant Tuegel was unanimously convicted by the jury, first, on count 3, and, a little later, on count 4, and the appellant Saia was unanimously convicted on count 4. On 9th October 1998, Martens was sentenced to 7 years' imprisonment on count 3, 4 years' imprisonment concurrently on count 4 and 1 year's imprisonment consecutively on count 6. He was also disqualified for 15 years from being a director or being concerned in the management of companies. On 15th January 1999, sitting at Middlesex Guildhall, Langley J recommended that Martens be deported on completion of his sentence. On 26th April 1999, the trial judge certified a benefit of £6.8 million and assets of £3.6 million in relation to Martens and a confiscation order was made in the sum of £3.6 million. Further orders were made in relation, in particular, to the balance of compensation to be paid, which attracted a default sentence of imprisonment of
10 years consecutively to the sentence of 8 years in the event of noncompliance. The total sentence on Martens was, therefore, 8 years' imprisonment, together with the other penalties to which we have referred.
The appellant Tuegel, on 9th October 1998, was sentenced to 5 years' imprisonment on count 3 and 3 years concurrently on count 4. He was disqualified for 10 years from being a director of a company. No recommendation in relation to deportation was made in his case. But on 22nd April 1999 a benefit in his case was certified by the judge at a sum in excess of £478,000 but, there being no releasable assets, no order was made for compensation.
On 9th October 1998 the appellant Saia was sentenced to 4 years' imprisonment on count 4, and he, like Tuegel, was disqualified for 10 years from being a director. On 15th January 1999 the judge recommended that Saia be deported on completion of his sentence, and on 26th April the judge assessed a benefit of £185,000 and assets of £155,000 were certified against Saia and a confiscation order made in the latter sum. He was also ordered to pay a sum of £90,000 odd held by his solicitors. A default order was made of 2 years and 5 months' imprisonment consecutive to the sentence of 4 years' imprisonment if the balance of the confiscation order was not paid in full by 23rd August 1999.
There was a co-accused called Ganatra, who pleaded guilty to a count in the indictment which corresponded to count 6, to which Martens had pleaded guilty, and he Ganatra was sentenced to 12 months' imprisonment.
The appellant Martens appeals against sentence by leave of the Single Judge, and the appellants Tuegel and Saia appeal against conviction and sentence by leave of the Single Judge. In relation to each of the appellants, the Single Judge gave leave to appeal the sentence of imprisonment passed on each of the appellants. In the course of the hearing before this Court, we gave leave to appeal in relation to the confiscation and deportation orders made in relation to Martens and Saia.
The case involved a number of bogus companies, many of them said to be banks. Because they were bogus, their full names are of no materiality and we shall, for the most part, refer to the companies by their initials.
Count 3 alleged that the appellants Martens and Tuegel conspired together and with others, between January 1993 and September 1995, to defraud such persons as might be induced to enter into agreements with AHE, CSD, ASDWIF and BancEurope.
In count 4 the three appellants were charged with conspiring together and with others, between December 1993 and September 1995, to defraud such persons as might be induced to enter into dealings with themselves and AHE and ASDWIF by falsely pretending that those companies were legitimate banks and that they were then trading as such and were authorised so to trade, and that AHE and ASD held in accounts at AHE and/or ASD the funds which they represented to their customers and to others were deposited in the accounts.
So far as count 3 is concerned, in general terms, it related to the fraudulent obtaining of advance fees from customers of bogus banks and companies operated by the appellants Martens and Tuegel, both of whom are German nationals. The bogus banks were established, some in the state of Delaware in the United States, by Martens and were controlled by him (according to the prosecution) for the sole purpose of defrauding people. He was the author and creator of various fraudulent schemes and he was indeed the person who drafted most, albeit not all, of the fraudulent documents which he and Tuegel used in the course of the conspiracy. It is to be noted that no business was ever done by these companies in Delaware and, although the Delaware legislation permitted companies to be incorporated with the name "bank" in the title, that legislation did not refer to "non bank banks", which was a concept about which Mr Martens, in particular, spoke. So far as Tuegel was concerned, he knew that, in this country, it was not possible properly to use the word "bank" unless the company in question was so licensed by the Bank of England. These companies had no assets or books of account, or any real address, nor did they operate any legitimate business. There were, however, attractive documents emanating from smart addresses in Manhattan and elsewhere, and one of the phrases used in the course of the trial was that there was effectively a "conman's kit" prepared by Martens and used to impress potential victims.
These companies operated through what was called a European Customer Services Centre in Torquay. They offered for sale, mainly to German, Swiss and Austrian customers, a range of supposedly sophisticated banking and financial services, including the provision of loans, guarantees and standby letters of credit (which we shall refer to as "SLCs"), munibond investment, mortgage backed loan stock and blocked funds letters (which we shall refer to as "BFLs"). The victims were induced into paying advance fees on the pretext that they were entering into a bona fide transaction, which would enable them to obtain loans or other financial benefits for a variety of projects.
The transactions were bogus and banking instruments were issued by Martens and Tuegel to the customers, which the prosecution said the appellants knew were worthless. The customers never obtained the loans which they were promised and they never got their money back. One consequence was that Martens and Tuegel each benefited to a substantial extent.
The association between Martens and Tuegel began in the autumn of 1992 when Martens approached Tuegel with a view to Tuegel fronting the sale of munibond investments in Switzerland on behalf of CSD and, in particular, there was an investment sold to a Swiss national called Guido Macai. The case for the prosecution was that, thereafter, over a period of some two-and-a-half or 3 years, Tuegel was an energetic and lively second-in-command to Martens. It was the case for the prosecution that he, Tuegel, knew from the outset that these activities were dishonest. He himself undoubtedly countersigned a number of bogus documents and some of the corporate documentation and he had direct contact with a number of the victims and was instrumental in persuading them to enter these fraudulent arrangements. Tuegel's business card described him as "Investment Manager" of ASDWIF, but some of the formal documents he signed as "President" or, on occasions, "Vice President" of one or other of the companies. In the spring and summer of 1995 Tuegel persuaded several people in Austria to enter into dealings with CBCD and AHE and, in connection with that, he opened bank accounts in Austria into which a total sum of some £290,000 was paid. Some of the inducements included the acquisition by the victims of foreign currency. Neither Martens nor Tuegel nor the companies had the means or, the prosecution said, intention, of honouring any of the various commitments and promises.
Some £6.8 million was paid over by the victims, who included lawyers, accountants and financial advisers. Martens' benefit was of the order of £3.5 million, and Tuegel's gains in the United Kingdom were of the order of £200,000, plus the further sum to which we have referred in relation to the Austrian transactions.
There were three techniques primarily used to effect the fraud. First, the munibond investment. Mr Macai, to whom we have referred, was persuaded to pay 250,000 Swiss francs, ostensibly to be invested in municipal bonds issued by the City of Los Angeles on the assurance of a 3-year return at an annual rate of 16.78%. In connection with that transaction, in May 1993, Macai signed a trust agreement which...
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