Ghuman & Ors, R v

THE VICE PRESIDENT: On 30th March 1999 at Southwark Crown Court, the appellant, Ghuman, and the applicants, Prior and Parmenter, were convicted of conspiracy to cheat the public revenue. On 20th January 1999, before the jury in that trial had been sworn, the applicant, Bamidele, changed his plea to guilty in relation to that same count. On 23rd April the four to whom we have referred were sentenced by His Honour Judge Focke QC, who had conducted the trial, to 5 years' imprisonment in the case of Ghuman; 30 months' imprisonment in the case of Parmenter; 2 years' imprisonment in the case of Prior and seven-and-a-half years' imprisonment in the case of Bamidele.

On 7th February 2000 confiscation orders were made under section 71 of the Criminal Justice Act 1988 in relation to Ghuman, in the sum of £75,000, with 18 months' imprisonment consecutively in default of payment and, in the case of Bamidele, in the sum of just over £401,000, with 4 years' imprisonment consecutively in default of payment.

On 11th January 2000 the Full Court, differently constituted, refused Parmenter's application for leave to appeal against sentence. On 3rd July 2000, a differently constituted Full Court refused Ghuman's applications for leave to appeal against conviction and sentence and, on 16th October 2000, a differently constituted Full Court dismissed Bamidele's appeal against sentence. Prior has made no previous applications to this Court.

Ghuman appeals against conviction, the Criminal Cases Review Commission having referred his case to this Court, under section 9 of the Criminal Appeal Act 1995. Parmenter, Prior and Bamidele seek an extension of time in excess of 4 years for leave to appeal against their convictions. Their applications have been referred to this Court by the Registrar so that they can be dealt with at the same time as Ghuman's appeal.

We grant Parmenter, Prior and Bamidele leave to appeal against conviction.

There was a further co-accused called McIlfatrick. He was sentenced to 4 years' imprisonment, having been convicted on the same count. His application for leave to appeal against conviction and sentence was refused by the Full Court in July 2000. He is not before the Court today, but there seems no reason to doubt that his conviction is as vulnerable to quashing as are the convictions of the four defendants who are before this Court.

The case arose from investigations called 'Operation Puma' in relation to a diversion fraud whereby in excess of £25 million in excise duty was evaded. That evasion arose from dealings with a bonded warehouse called London City Bond.

After the convictions in relation to the present appellants had occurred, it became apparent, during the course of trials of others for similar offences in relation to the activities of the London City Bond, that the directors of that bonded warehouse, Alfred and Edward Allington, had been participating informants and Customs and Excise officers (the prosecution being brought by Customs and Excise) had known about the fraud being carried on at the London City Bond and had allowed it to continue.

The facts, so far as they are presently material, can be shortly summarised. Evasion of excise duty on beers and spirits occurred between January 1996 and January 1998. Goods which had been bought free of duty and held in the LCB warehouse were removed from bond upon representations being made that they were to be exported. In fact, the goods were not exported, but were diverted, without duty having been paid, on to the United Kingdom market. The duty payable on a trailer load of, for example, high strength beer would properly be about £20,000. The duty payable on a similar load of spirits would be of the order of £90,000 to £100,000.

Duty is payable on beer and spirits sold in the United Kingdom, but payment of that duty is suspended if such goods are exported to a country within the European Union. Such exportation would be accompanied by a document known as an accompanying administrative document. That document is raised by a from the bonded warehouse from which the goods are to be exported.

In the present case, as in other cases, three of the copies of the AAD were forged and returned to the London City Bond, so as to create the appearance, false though it was, that the goods had been properly delivered to destinations, in this case, in France and Spain. A number of companies under the control of the conspirators were used in the fraud to buy the alcohol in bond, ostensibly as exporters, to provide haulage and also to sell the goods through wholesalers and retailers in the United Kingdom.

The roles of these appellants were, briefly, as follow. Bamidele was the principal organiser and beneficiary of the fraud. Ghuman was closely connected to Bamidele and caused the goods to be removed from bond to ostensible export. He set up the haulage companies. McIlfatrick, to whom we have referred, controlled most of the haulage side of the fraud and the collection of paperwork taken from the bond by the drivers. Parmenter was McIlfatrick's right-hand man. Prior was a haulier who organised the collection and delivery of loads from LCB, sometimes driving the loads himself.

On behalf of the prosecution, Mr Menary QC does not seek to uphold the convictions of any of these four appellants. Essentially that is for four reasons: first, nondisclosure to the trial judge of the true roles of Edward and Alfred Allington, both of whom gave evidence for the prosecution in relation to these appellants; secondly, the failure by Bernie Small, a Customs and Excise officer, who was the handler of the relevant informants, to keep proper records, such as are required in relation to the interviewing and handling of informants; thirdly, because Alfred Allington lied on oath; and, fourthly, because of the uncertainty about the continuity of the AAD exhibits, in the collection of which Bernie Small played a major role.

It is admitted, for the purposes of this appeal, in relation to matters which Mr Menary accepts Judge Focke should have been informed about that:

In the light of that admission Mr Menary tells us, and we accept, Alfred Allington should never have been called as a witness relied on by the prosecution at the trial of these four appellants.

In order that the course of events can be properly understood, it is necessary to refer in a little more detail to aspects of nondisclosure in relation to the Allingtons, which the prosecution accept fatally undermine the convictions of these appellants.

So far as Edward Allington is concerned, he signed 101 of the AADs in relation to activities giving rise to 'Operation Puma' between June and September 1997. During that same period he passed information to Bernie Small about Bamidele and a number of the relevant companies.

In the appeal of R v Villiers & Ors [2001] EWCA Crim 2505, in November 2001 the Court of Appeal concluded, having heard evidence, that both Edward and Alfred Allington were participating informants in the fraud conducted through LCB. Furthermore, it was conceded by the Crown in the appeals of Early & Ors [2003] 1 Cr App R 288, in July 2002, that both those brothers were facilitating fraud as participating informants from August 1996. In consequence of these matters, it follows that Edward Allington was a participating informant in 'Operation Puma'.

A PII application was made to His Honour Judge Focke on 19th January 1999. He was told that Edward Allington was the principal informant but he was not told that he was a participating informant. As to Alfred Allington, the existence of a day book, kept by Bernie Small, was not brought to the attention of prosecuting counsel, or the case officer in relation to these appellants. It demonstrated that Alfred Allington was a participating informant.

In June 2003 it was discovered that Alfred Allington had been registered as an informant by the Customs and Excise for a brief period during the summer of 1994. The day book showed that he had supplied information about the activities of Bamidele, Ghuman and Prior to Customs and Excise. From those entries the inference was supported that Alfred Allington was encouraged by Customs & Excise to allow Bamidele to commit fraud at LCB. Those entries also demonstrated that Alfred Allington knew that Bamidele was engaged in fraud. Judge Focke was not told of this status of Alfred Allington nor, as we have indicated, was he shown the important day book.

As to Bernie Small, he gave evidence at Liverpool in an abuse of process hearing in the case of Awam & Ors before Grigson J in the autumn of 2002. He conceded, in that evidence, that there were many occasions when he had failed to make a record of conversations with the Allingtons. Judge Focke was not informed of the absence of a full record of his contacts with the Allington brothers, in breach of the informant handling guidelines. There was, furthermore, no controlling officer overseeing the contact between Bernie Small and Alfred Allington. That, too, was a breach of the informant handling guidelines.

So far as the evidence which was given in the trial of these appellants is concerned, Alfred Allington lied in a number of respects. He had, on 15th February 1999 given evidence during an abuse of process hearing, before Judge Hucker, at Kingston Crown Court, in relation to a defendant called MM Patel in 'Operation Fallover'. He, Patel, was one of the successful appellants in the case of Early to which we have referred. In paragraph 17 of the judgment of the Court in Early, the conclusion was expressed that Alfred Allington had, in his evidence before Judge Hucker, lied about his knowledge of the fraud, in claiming he was doing n more than he felt was required of an extent made (see para 12 of the judgment).

The very next day, 16th February, Alfred Allington gave evidence before Judge Focke in the present case. Counsel were unaware of what he had said the day before at Kingston. He gave evidence before Judge Focke which was, at best, misleading and, at worst, dishonest.

In the hearing before Grigson J, in the autumn of 2002, to which we have referred, Bernie Small conceded that he had taken AADs relevant to 'Operation Puma' without making any note or giving any receipts for them. It is apparent that a large number of those documents were taken in that way and, in consequence, it would be impossible properly to demonstrate continuity in relation to those exhibits. All of these matters are closely parallel to the difficulties dealt with by this Court in the case of Villiers and Early.

In consequence, the prosecution concede that full disclosure may well have founded an abuse of process application on behalf of these appellants, of which, in the absence of full disclosure, they have been deprived. Furthermore, Judge Focke made decisions in relation to disclosure which were based on information which was incomplete. Had he known the true status of the Allington brothers, it is likely that he would have ordered disclosure, with the likely result that the prosecution would have offered no evidence.

Notwithstanding that, among these appellants, Bamidele pleaded guilty, he did so without having had the benefit of proper disclosure. Therefore, the Crown accepts that he should not be in a worse position than the other appellants. The judgment of the Court in Early contains two passages which presently bear repetition. In paragraph 18, at page 299 of the report, appears the following:

For the reasons which we have sought to explain, the convictions of these four appellants, including that of Bamidele, who pleaded guilty, are tainted beyond redemption. Their appeals are allowed and their respective convictions quashed.