The Serious Organised Crime Agency v Hakki Yaman Namli and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Males |
| Judgment Date | 10 May 2013 |
| Neutral Citation | [2013] EWHC 1200 (QB) |
| Docket Number | Case No: HQ10X04279 |
| Court | Queen's Bench Division |
| Date | 10 May 2013 |
[2013] EWHC 1200 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Males
Case No: HQ10X04279
Mr M Beloff QC, Mr T Richards and Mr A Cook (instructed by SOCA Legal) for the Claimant
Mr A Trollope QC and Mr K Talbot (instructed by Mackrell Turner Garrett) for the Defendants
Hearing dates: 11 th– 24 th April 2013
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is a claim by the Serious Organised Crime Agency ("SOCA") under sections 243 and 266 of the Proceeds of Crime Act 2002 (" POCA") for a civil recovery order in respect of monies totalling about US $7 million in a bank account at Coutts & Co in London. The money in the Coutts account is held in the name of the second defendant ("Topinvest"), a British Virgin Islands company owned and controlled by the first defendant, Hakki Yaman Namli, an individual ordinarily resident in Turkey.
SOCA contends that the money in the Topinvest account at Coutts is or represents property obtained through unlawful conduct within the meaning of sections 304 to 307 of POCA and that it is therefore entitled to a recovery order in respect of that money. Its case is that:
(1) Mr Namli has at all material times been involved in serious financial crime on a large scale in several jurisdictions, making use of First Merchant Bank OSH Limited ("FMB"), a bank which he owned and controlled which was incorporated in that part of Cyprus known as the Turkish Republic of Northern Cyprus ("TRNC"), the criminal activity in question consisting of the issuing of fraudulent banking instruments, together with money-laundering of the proceeds of crime; and that
(2) funds consisting of six credits to Topinvest's account at Coutts made between 12 March 1999 and 4 February 2005 ("Credits 1 to 6"), together with subsequent profits thereon, were obtained through Mr Namli's unlawful conduct. This conclusion is said to be justified on two bases: first, that the unlawful nature of the business conducted by FMB, together with Mr Namli's failure to identify a legitimate source for the funds, justifies the conclusion that they represent the fruits of such unlawful conduct; and second, that any rate five out of the six credits can be shown to be specifically referable to particular criminal activities in which Mr Namli was involved.
The six credits into the Topinvest account at Coutts, amounting in total to US $5,857,000, were as follows:
(1) Credit 1: US $1 million received on 12 March 1999 from an account held by FMB at ABN-AMRO Bank in New York;
(2) Credit 2: US $1 million received on 14 December 2001 from Deutsche Bank, Frankfurt, by order of Libra Bank, Bucharest, another bank owned and controlled by Mr Namli;
(3) Credit 3: US$1.2 million received on 6 March 2002 from an account at Libra Bank in the name of United Systems Limited, a BVI company owned and controlled by Mr Namli;
(4) Credit 4: US $550,000 received on 16 September 2002 from an unspecified account at Libra Bank;
(5) Credit 5: US $697,500 received on 13 April 2004 from an investment account held at Deutsche Bank, Geneva in the name of Mr Namli; and
(6) Credit 6: US $1.41 million received on 4 February 2005 from an investment account at Banque Ferrier Lullin (Luxembourg) SA (now UBS Luxembourg) held in the name of Stuart & Associates Corp, another entity owned and controlled by Mr Namli.
It is not disputed that these credits were made as indicated above and that the entities referred to were indeed owned and controlled by Mr Namli.
SOCA also claims the profits and interest earned on these funds.
The criminal activity on which SOCA principally relies is said to have taken place between 1996 and 2002, although it also points to what it says was an earlier instance of fraudulent conduct by Mr Namli in 1987. It has identified what it says amount to at least six sets of criminal activities in which Mr Namli was involved. SOCA's case, adopting the labels which it applies to the various activities, is as follows:
(1) The German fraud: In October 1987, using a false identity, Mr Namli fraudulently obtained the sum of DM 411,500 from ten different German branches of Dresdner Bank AG on the strength of false letters of credit purportedly issued by the Central Bank of the Republic of Turkey. A civil judgment in default was entered against Mr Namli in Germany. That judgment was subsequently registered in Turkey and was satisfied by Mr Namli.
(2) The English frauds: Between at least 1996 and 1998, Mr Namli was involved in a series of frauds in England whereby FMB issued what are said to have been fraudulent banking instruments to clients of three English firms of solicitors. An investigation by the Serious Fraud Office led to the prosecution of the solicitors involved and others, but the prosecution collapsed due to the inadvertent disclosure of sensitive material by the prosecution to the defence. However, there were disciplinary proceedings before the Solicitors Disciplinary Tribunal, which included the making of findings of fraud on the part of the solicitors. SOCA contends that part of Credit 6 represents the proceeds of these English frauds.
(3) TheLepkanich fraud: In 1997, for a fee of US $1 million, FMB issued what was described as a standby letter of credit to (or for the benefit of) a would-be investor, Gerry Lepkanich, who had been introduced to Mr Namli by a Mr Ralph Jarson, who had in turn been introduced to Mr Lepkanich by an individual named Carolyn Joan Patrick. SOCA's case is that the standby letter of credit had no legitimate purpose or value, and was sold to Mr Lepkanich pursuant to a fraud by Mr Jarson and Mr Namli. In criminal proceedings in the United States against Mr Jarson, Mr Jarson was acquitted of the charges relating to the Lepkanich fraud, but was convicted in relation to a different fraud, the Laconia fraud referred to below. He was also one of those involved in the English frauds already referred to, or at any rate was closely associated with the fraudsters.
(4) The Turkish loan-backs: In 1996 and 1997, Mr Namli and his family engaged in a series of "loan-back" transactions which involved BVI companies owned and controlled by Mr Namli lending money to Mr Namli and members of his family in Turkey. Mr Namli and his family were charged by the Turkish authorities with money laundering and, following a trial in January 2000, were convicted, but their convictions were overturned on appeal. At a fresh trial they were then acquitted for lack of evidence of criminal conduct.
(5) The Bank House fraud: In May 1998, three different investors were persuaded to transfer sums totalling US $24 million to bank accounts held in Brussels by an entity known as the Corporation of the BankHouse Inc. ("CoB"). US $19 million of this was transferred on by CoB to an account in New York controlled by a Mr Henry Pearlberg, who on 4 February 1999 transferred about US $16.7 million to FMB's account at ABN AMRO in New York, to be used for the purchase of what were described as "Revolving Underwriting Facilities" issued by FMB, it seems at the instigation of Ms Patrick, again in return for substantial fees. The Bank House fraud has resulted in extensive and complicated litigation in the United States. SOCA contends that Credit 1 is specifically referable to this fraud.
(6) The Laconia fraud: Between May 2001 and April 2002 Mr Jarson and Mr Namli attempted to sell to an individual in New York, who called himself "Michael Shannon", an FMB banking document (to be issued for a fee of US $2 million) which, it was proposed, would misrepresent the financial position of a company named Laconia Capital to potential investors. In fact, "Michael Shannon" was a Special Agent of the United States Federal Bureau of Investigation named Keeley. Mr Jarson was arrested and charged (together with Mr Namli) with counts of wire fraud and conspiracy to commit wire fraud. Mr Jarson was convicted, including on one count of conspiracy with Mr Namli. As indicated above, Mr Jarson was at the same time charged in connection with the Lepkanich fraud, but was acquitted on that count. Mr Jarson appealed against his conviction but died before the appeal could be heard.
With the exception of the German fraud where the dishonest conduct alleged is different, the fraudulent activity in which Mr Namli and FMB are alleged to have been engaged is a form of advance fee fraud. Typically, a victim would be led to believe that he could obtain access to an investment programme, usually a programme which was highly confidential and open only to a select few, promising extraordinarily high returns. The victim would be told that in order to participate in this investment he would need to demonstrate that he had access to a certain level of funding. It is said that FMB's role in these frauds was to produce false and misleading banking instruments confirming the availability of funds, in return for substantial advance payments. These instruments were generally signed by Mr Namli personally. However, SOCA's case is that although they were designed to convey the impression that the victim had access to these funds, in fact the banking instruments produced by FMB were subject to conditions which either could not be fulfilled in practice or were so vague that FMB would always be in a position to say that they had not been fulfilled. Examples of such banking instruments examined in the course of the evidence in this case included credit reference letters,...
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