Burdett & Anor, R. v

LORD JUSTICE THOMAS: On 5th June 2008 at the Crown Court at Hull, before Mr Recorder Watson QC, following a 4-day retrial (in fact the second retrial) the appellants were convicted of entering into or being concerned in a money laundering arrangement contrary to section 328(1) of the Proceeds of Crime Act 2002. They were sentenced on the same day to three years' imprisonment. Both appeal against conviction and sentence by leave of the single judge. We have heard the appeal against conviction and in the light of our judgment on that it will become necessary to consider the position on sentence on which we will hear argument in due course.

The facts can be briefly summarised. We must commend the way in which counsel cooperated together to produce a summary for the jury in terms of admissions. One matter arises out of the way in which this was done which forms a ground of appeal, but it was commendable that this was done because the original criminal activity in this case involved people of the ages between 91 years of age and one person much younger at 57 years of age, but the majority of those involved in the original criminal activity were in their late eighties or early nineties. To have caused these people to have given evidence would have put a very considerable strain on them. Therefore it is a very commendable feature of this case as to the way in which it was proceeded with.

The facts can be summarised. Various people of the ages we have described across the country were visited by salesmen whom they believed to be from a reputable company. Some of the complainants described the salesmen as convincing, persuasive, fast talking and having the gift of the gab. No doubt they had. Some described them as being oppressive and overbearing. The complainants were persuaded to purchase what purported to be dehumidifiers and air purifiers for vastly inflated prices of 20 or more times their true value. Typically a piece of equipment with a market value of £100 would be sold for between £2,000 and £3,000. Not only was the value grossly inflated, but the pieces of equipment had removed from them all identifying labels. Operating manuals or other accompanying documentation normally provided (which would have demonstrated the simplicity of maintenance) were not provided. The complainants were then persuaded to pay for insurance and service contracts for the equipment of a value between £3,000 and £5,000 in circumstances where the salesmen might purport to check a filter every six months. In some instances the complainant was visited again; a second contract covering the same or substantially the same period was then signed. No paperwork was supplied setting out the purported terms of any of the contracts. They were often falsely told that the pieces of equipment did not need to be plugged in to operate. For these pieces of equipment and for the service contracts these unfortunate victims paid by cheque. The complainants all said that if they had known the true cost of the equipment or what was being offered to them they would not have issued the relevant cheque. It goes without saying that this was a most despicable fraud committed on the vulnerable people concerned.

On 2nd April 2002 the appellant Burdett opened a bank account in the name of Clear Clearance at the HSBC bank. When the account was opened - Burdett provided genuine identification and a genuine address. Between 1st June 2004 and 30th June 2005, Burdett paid into the Clear Clearance account cheques to a total value of £338,000. In fact in respect of this account the cheques had been issued by those complainants who had been swindled in the way we have set out.

On 2nd March 2005 the appellant Smith opened a bank account in his name trading as Kirby Products at a Lloyds TSB bank. When the account was opened this appellant also provided genuine identification which included a genuine address. Between 20th April 2005 and 5th April 2006 the appellant Smith paid into the Kirby Products account cheques to a total value of £313,000. These were cheques that had originated from the complainants who had been swindled.

In 2004 the police became aware of the swindling of these elderly people. After enquiries the accounts to which we have referred were traced. The appellants were arrested and their houses searched. Telephone records were examined. As emerged at the trial nothing was found which linked either appellant to knowledge of this particular underlying fraud.

The prosecution case was therefore brought against both men on the basis they had turned a blind eye to the source of the funds which passed through their two bank accounts as being the proceeds of a criminal enterprise.

In support of the prosecution case, and this is important, only one witness, a police officer, was called. He was called simply to read the interviews. He was cross-examined principally to show the facts we have set out, namely that nothing was found linking either of these two appellants to the underlying fraud.

It is next necessary to indicate in outline a part of each of the appellant's case at trial. The appellant Burdett was a car salesman. He was a man of previous good character. He had opened the account in the name of Clear Clearance because he had seen an advertisement for a service for converting cheques into cash. He decided this was an easy way to make money. He put an advertisement for this service into the local press in September 2002 and got no response, although he was offered by an individual at the time an amount of £200 for a cheque cashed. A little while later the man contacted him again. This was a man who was referred to variously at the trial but it is convenient to call him "Geordie Bob". He approached the appellant Burdett and said he wanted to keep cash and funds away from his wife whom he was in the process of divorcing. He therefore did not want her to know what cheques and monies he was getting in so that in the divorce she would be ignorant as to his true state of wealth. The appellant Burdett then gave an account, the details of which are not relevant to this appeal, in respect of accepting cheques from the man and cashing them. At a later stage this appellant said he did not wish to do it any more and when asked by Geordie Bob who might continue the service the appellant Burdett suggested the appellant Smith, whom he knew needed funds at that time.

Smith was also a man of good character. He was a floor manager at a local firm. His account was that he got a call from a man called Bob in 2005. At the time he was in debt and he wanted to start a family. He was told by Bob that a friend had recommended him. Bob explained that his wife was having an affair and he wanted an account through which cheques could be passed so he could obtain the cash without her knowing. He initially thought this was not the right thing to do, but Bob was very persuasive and he agreed.

Those were essentially the accounts given by each of the appellants in their interviews with the police and the accounts which they gave in evidence at the trial. The issue for the jury was a relatively simple one. Had the prosecution proved that they had turned a blind eye to the proceeds of the cheques being the subject of a criminal enterprise? Did the jury accept the account that was given? The jury convicted both after a retirement of two hours and 10 minutes. This was a classic jury case because it was for the jury to make up their minds as to where the truth lay.

There are three grounds of the appeal. As it has emerged this morning, two of the grounds have been argued by counsel for Burdett and one by counsel for Smith. They have done so because of the particular emphasis that is put on the particular grounds by each appellant, but they rely each on each other's arguments as to the overall safety of the conviction.

The first ground that is taken on the appeal relates to the admission of the facts in this case that the complainants were elderly and vulnerable. Both appellants sought to have the facts admitted on the basis that there should be no reference to the age or state of the complainants. It is clear and it is accepted by counsel, that if they had not made the admissions, the position would have been that all the complainants whom we have described (being between the ages of 91 and 57, but the majority being in their late eighties or nineties) would have been called and given their evidence. It is beyond argument that it was a true and fair description to describe the complainants as elderly and vulnerable. So although that was the truth and the full extent of the background, it was submitted to the Recorder that it would be prejudicial to the appellants for that evidence to be put before the jury. Indeed it would be so prejudicial that it would affect the fairness of the trial and hence should be excluded under section 78 of the Police and Criminal Evidence Act. The Recorder ruled against it. First, he said it was all part of the background, and secondly, he said it would help the defence as the original conman or conmen would be seen as a person who was persuasive and had persuaded the elderly and vulnerable.

It seems to us, though for reasons that are different to those of the Recorder in one respect, that the ruling was plainly right. In the first place, it was all part of the background. The jury would in fact have been misled if this evidence had not been put before them. It was a true and fair summary of the underlying fraud and it would have been wrong and misleading to have kept it from them. Secondly, it also seems to us that it was material to the question as to the persuasiveness of the person who may have put the proposition that the appellants said was put to them. It would be said, 'Well this might be a man who might take in the elderly and vulnerable, but he certainly would not take in much younger men, one of whom was a car salesman who can therefore be assumed to have that degree of business acumen necessary to carry out that trade and the other person being a floor manager who had a responsible position in a company'. So indeed it was material. In any event we can see no possible unfairness. That ground of appeal fails.

The second ground of appeal arises out of the change in the law under which policemen now serve on juries. What happened was that after the jury had been empanelled but before the sole prosecution witness, DC Hawley, was called, it was discovered that one of the jurors was a policeman. It is first necessary to point out that DC Hawley was a detective constable based in Sheffield and a member of the South Yorkshire Constabulary. The trial was in fact taking place in Humberside at Hull. The policeman on the jury (who eventually became its foreman) was a road traffic officer based at Duffield in Humberside and a member of the Humberside Constabulary. This is not a case where there could be any conceivable connection between the officers. They came from different forces, some geographic distance apart.

An application was made to the judge to discharge the jury. It was advanced on the basis that there was an issue between the appellant Smith and the police officer, DC Hawley, who was going to give evidence. It was not apparent to us precisely what that issue was from the papers, but with the considerable assistance of counsel before us (to whom we are greatly indebted) it is now quite clear what the position was. DC Hawley was primarily, as we have indicated, called to prove the interviews. After he had read out the interviews, which we understand took two to two-and-a-half hours, he was asked questions, as we have indicated, in relation to matters that helped the defence, namely the searches of the property and the examination of the telephone records. However, there was one matter on which it appears there was an aspect of his evidence that was to be challenged. During the course of his interview on tape it appears that Smith told the police officers that "Geordie Bob" was to meet them at the Waitrose supermarket in Hull that same day between 2pm and 3pm. After the tape had come to an end it was the account of the appellant Smith that he offered to go with the police officers to the supermarket at Hull. He had made that offer before 2 p.m. Because there had been a previous trial, it was apparent that the evidence that DC Hawley would give was that it was his recollection that the offer to go with them was made after 2 to 3 o'clock, that is after the supposed visit of Geordie Bob to the supermarket. As explained to us, the point that was sought to be made was simply this. That, as it was important in a case of this kind that a defendant identifies the person whom he is said to have dealt with, by him offering to go with the police and identify Geordie Bob, Smith was making an offer at a time when it would be very helpful to the police, namely before they went to look at the supermarket car park between 2pm and 3pm and not after they had come back.

The way in which this matter was put before the jury was in DC Hawley’s cross examination:

The law in relation to the position of a police officer being on a jury has been clarified by the House of Lords in R v Abdroikov [2007] UKHL 37 and by this court in R v Khan [2008] EWCA Crim. 531, particularly paragraphs 19 to 32. At those paragraphs the then Lord Chief Justice, Lord Phillips of Worth Maltravers, and Sir Igor Judge (then the President) sitting with Silber J attempted to pull together in succinct paragraphs the issues to be considered. There are essentially two issues. First of all, whether, if the police evidence is challenged, it forms an important part of the prosecution case, and secondly, any possibility of bias that might result from the closeness of the connection between the policeman on the jury and the police officer giving evidence.

We have taken into account both matters. It seems to us that it is clear there was no connection between the two officers. It would therefore follow that no right-thinking person would think there would be bias. Secondly, and more crucially in this case, it is clear that the point raised on behalf of Smith was not an important part of the prosecution case, nor a serious issue between the defence and the prosecution. It was a small part of Smith’s case. We cannot therefore consider that this ground of the appeal has any merit at all. It can be dismissed simply by the application of now the well-established principles to the facts. The answer is clear.

The third ground of appeal relates to the fairness of the summing-up. It is important to stress again the way this case proceeded. The sole prosecution witness was the police constable who read out the interviews. Both defendants gave evidence at length and were cross-examined. When the Recorder came to sum up the case to the jury he obviously had to exercise his skill and judgment as to the best way to do it in those circumstances. It is complained in this case that the way in which he summed up was unfair, that he made comments that were prejudicial and that it was not a fair summing-up. We do not think this is a proper characterisation. What he attempted to do was to put the law before the jury and in the course of putting the law before the jury he took certain examples. It might be thought in one sense that they could be described as prejudicial, but we would think a more accurate description was that they were illustrating points of law by reference to issues that were probative in the case. Therefore, looking at the group of complaints that go to the way in which he set out the law, we see no merit in those.

Much more extensive criticism was made of a long passage in the summing-up where the Recorder went through the jury bundle. The way in which he summed the case up was to go through the bundle of documents pointing out what the prosecution case was. It is true that he pointed matters out in such a way that, if the jury were to accept the explanation put forward by the Crown, they were highly probative of guilt. However the fact that the judge points out matters that are probative of guilt is not a judge acting in a manner that is prejudicial; what he is doing is summarising the points of the prosecution case. If, of course, he had not summarised the defence case fairly then that would be a very serious matter. But that is not what is suggested. It might have been better had this Recorder followed the practice that is generally preferred of juxtaposing the prosecution case and the defence case on each issue in one place. He followed the less common and less desirable practice of summarising the whole of the Crown’s evidence and then the whole of the defence’s evidence. But looking at the summing-up as a whole no unfairness resulted from that.

Finally, there is a complaint in relation to a passage where the Recorder made an error which could have been seen as a serious error in respect of fairness to the appellants. However, he put that right.

We have looked at the summing-up in its entirety. We consider that it was an entirely fair summing-up. The fact that it pointed out many matters that were probative of the appellants' guilt is merely an indication of the strength of the prosecution case against them. We have considered in the light of all the points the overall safety of the conviction and we are quite satisfied these are safe convictions. The appeals against conviction are therefore dismissed.

LORD JUSTICE THOMAS: We have already set out at length the facts in this case. We now turn to consider the appeal against sentence. We treat both appellants as effectively of good character. They, of course, do not have the mitigation of a guilty plea. But there are matters to which we should have regard and to which we think, with respect to the learned Recorder, he did not have sufficient regard. First of all, there had been two previous trials and a very significant delay in bringing the matter on. Secondly, the extent of the benefit which each made was in doubt, but it was absolutely clear that the way in which the confiscation provisions would operate would be to strip them of all the funds they had and cause a devastating effect on their families. Of course this is a case where this was a money laundering operation conducted over a period of time and there was no real financial pressure. In respect of Burdett it was simply a case of greed, whereas in the case of Smith there may have been some small element of financial pressure.

It seems to us, looking at the whole of the criminality in this case and taking account in particular of the fact that there is no evidence at all that they knew the source of the funds was from a predatory action of the most despicable kind on the vulnerable, we consider the sentences were too long. Had there been evidence that they had known of the source of the funds, these sentences would have been far too short; but there is no evidence and we emphasise that. This must be looked on as a money laundering case against the background we have set out. We quash the sentences of three years and substitute in each case a sentence of two years.