Special investigation: Scandal of super-rich criminals given legal aid to fight fraud trial

 
P8-9 Fraudsters
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Two criminals worth tens of millions of pounds had their legal bills of more than £100,000 paid for by the taxpayer after making “ludicrous” claims of poverty.

During their trial for a multi-million-pound VAT fraud, Syed Ahmed lived in his £4.5  million flat overlooking Hyde Park, while Shakeel Ahmad stayed in his £2.2  million home in Middlesex. The pair also owned 20 other properties in Britain and the Gulf, including two tower blocks in Dubai, and had cars including a Ferrari and a Porsche.

But they still both received legal aid. One of the main reasons is a controversial rule which prevents assets frozen by the courts from being used to pay defence bills. It is supposed to ensure that assets are preserved so that the full profits of any criminal enterprise can be confiscated upon conviction. Offenders can also be asked to repay legal aid costs.

The exact total of the men’s legal bill is a secret because officials claim that it is “sensitive personal data” that should not be disclosed. However, the Evening Standard has discovered that the amount was a six-figure sum “well over” £100,000. The bill was so high that it was classed as a “Very High Cost Case”, the average cost of such cases being around £1  million.

MPs and lawyers today warned that the freezing of assets, allowing very wealthy criminals to claim legal aid, was “shockingly wasteful”.

Official figures show that, in the majority of cases, serious criminals fail to repay their illicit gains, with more than £1  billion outstanding in unpaid confiscation orders. Most legal aid costs are also not repaid.

Senior barristers said there were hundreds more such cases and that tens of millions of pounds will continue to be squandered unless ministers reform the system.

Similar cases identified by this newspaper include legal aid payments to members of a £100  million London drugs and money-laundering gang who bought properties and cars including a Bentley and a Porsche.

Jailed Polly Peck tycoon Asil Nadir and a wealthy London gangland boss, who used death threats and violence to extort protection money from Kurds in London, also received legal aid.

Lord Macdonald QC, the former Director of Public Prosecutions, said that it was “completely wrong” that “fabulously wealthy” defendants were receiving taxpayers’ money and that the public would be “outraged” if it knew the full scale of the problem.

“The Government has got a real blind spot, because we have a situation where fabulously wealthy people are not being required to spend their own money on legal representation and are instead getting legal aid,” he said.

“I am talking about people worth tens of millions of pounds getting money from the state to fund representation in criminal cases. It’s completely wrong. Legal aid has been cut for people who have housing problems, it’s been cut for people who have welfare problems, people right at the bottom of the pile.

“It’s not fair that very rich people are getting legal aid and very poor people aren’t. The taxpayer shouldn’t have to pay the defence lawyers for wealthy criminals.”

Ahmed and Ahmad were found by a judge to have made more than £16  million each from an elaborate VAT fraud. He said one scam involving the fraudulent trading of computer chips had made them £12.6  million in just 18 days and was one of a series of similar frauds carried out by them. The pair were said to be worth ten millions of pounds when they were arrested, but they received legal aid after claiming that they did not own the assets, which were held via a complex network of trusts and companies. They both insisted that they were penniless.

But a crown court judge described their claims of poverty as “ludicrous” and said the pair were “complete liars” who had given “deeply mendacious” and “unscrupulous” evidence about the extent of their wealth.

He said their assets included a company valued at £40  million, two other companies which made £25  million in profits, trust funds in Jersey and a large number of properties. These included the £4.5  million flat in Wellington Court, Knightsbridge, which Ahmed claimed he was occupying under a £1 a week “licence” from the company that owned it. A judge later ruled that he owned the company and the flat.

Other property owned by the men included a £1.5  million home in Buckinghamshire, a £2.2  million house in Northwood, Middlesex, and four other British homes. In a 2010 judgment, Mr Justice Flaux told Leicester crown court that the pair owned 15 properties in the Gulf and two Dubai tower blocks.

He said: “Both defendants are articulate, intelligent and educated. It is clear that they were and are financially sophisticated and ... they amassed a fortune over a relatively short period of time.

“They are both unscrupulous and deeply mendacious, particularly about their assets. The suggestion advanced by both of them that they are now penniless is frankly ludicrous.

“The truth is that, on any view, there are other hidden assets which they have failed to disclose. I should add that I formed my firm view that they were both complete liars when it came to revealing their assets from my observation of them throughout the confiscation hearing (including during their evidence), quite independently of the fact that they were convicted fraudsters.”

The pair were both jailed for seven years after being convicted of fraud in 2007. They were given an additional 10-year “default” sentence in 2010 after failing to repay a penny of the confiscation order. They have still not repaid any of their gains.

Crown Prosecution Service figures obtained by the Evening Standard revealed this year that convicted criminals owe £1.017  billion in unpaid confiscation orders, a figure that has risen by nearly £250  million in the last three years.

The Standard has also revealed how nearly 170 millionaire offenders ordered by the courts to pay back £1  million or more have not done so. Lawyers say that many will also have received legal aid.

Other senior lawyers today backed calls to reform the system. Lord Carlile QC, a leading barrister, said: “If you have very, very wealthy people who are suspects and they can afford to pay for their cases, they should be required to pay. It is a no-brainer.”

Michael Todd QC, chairman of the Bar Council, said: “The money could be better used in hospitals or other public services.”

Ministers admitted recently that less than a fifth of the legal aid owed by convicted criminals last year was repaid. Although they announced plans to seize the cars of wealthy offenders, lawyers dismissed it as a “gimmick”.

A spokesman for the Ministry of Justice said it was considering reforms “to ensure that both proceeds of crime and legal aid costs are recovered”.

The joint investigation for the Standard and BBC Inside Out will be screened on BBC1 at 7.30pm tonight.

Other crooks funded by state

Asil Nadir stole £29 million from his Polly Peck empire and travelled to court from his Mayfair home in a chauffeur-driven Jaguar.

Raymond May Convicted fraudster who owned homes and a yacht and made more than £3.2 million from crime. Received at least £411,000 in legal aid.

Eyad Iktilat Led £100 million drug gang with his financier Maythem al-Ansari. Iktilat drove Ferrari and Bentley. Ansari owned £3m home in Hillingdon.

Abdullah Baybasin Alleged to control a £10 billion crime gang. Jailed for 12  years for blackmail and perverting the course of justice.

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