AA & SA, R v

On 13 October 2010 we heard the appeal of AA and SA against their conviction and sentence for contempt of court by HHJ Karsten QC in the Crown Court at Blackfriars on 25 August 2010. We dismissed the appeals against conviction and we also dismissed the appeals against the sentence of 18 months imprisonment that had been imposed by the judge. We announced that our reasons would be handed down at a later date.

These are our reasons for dismissing the appeals.

We will call the first appellant “AA” and his brother, the second appellant “SA”. AA was the beneficial owner of a company called Sasaf Limited (“Sasaf”). SA was the company secretary of Sasaf. Both AA and SA were the only authorised signatories of the Sasaf bank account held at Barclays, in the UK, and at the First Curacao International Bank (“FCIB”). That is an internet bank based in the Netherlands Antilles. Accounts opened with that bank are password protected. SA was the beneficial owner of a company called Enjien Limited (“Enjien”). He was the sole authorised signatory of Enjien’s bank accounts. One was held at Barclays and another was also held at FCIB. FCIB was raided and closed down by the Dutch authorities in September 2006.

The two companies Sasaf and Enjien were part of a collection of companies which HMRC and Lancashire police and the North West Regional Asset Recovery Team began to investigate in January 2006, on suspicion that the companies were involved in a very serious VAT fraud. HMRC’s case is that the fraud was a variation of the well-known “carousel” type of fraud, whereby one company (“A”) imports goods into the UK free of VAT, then A sells the goods on in the UK with VAT but does not account for the VAT to HMRC. Frequently the importing company A then goes “missing”, having failed to account to HMRC for the VAT element of the sale on to another UK company. Eventually, usually through a series of intermediate sales to companies within the UK, (known as “buffer traders”) the goods are finally exported from the UK by a so-called “broker” company (“B”). Because VAT is not payable upon exported goods, B claims the VAT element of the purchase price purportedly paid to the last “buffer trader”. In fact the whole process, from import to export, is bogus and is simply an unlawful means of extracting money from the public purse.

These investigations found that Sasaf and Enjien were involved in the export of containers to the United Arab Emirates which were said to contain high value quality textiles. An inspection of containers about to be loaded on board a ship at Felixstowe revealed that its meagre contents were of low quality and little worth. The case of the Crown is that AA and SA, through Sasaf and Enjien, acted as “brokers” and had conspired with others to cheat HMRC by falsely reclaiming VAT on high value goods which the companies were purporting to export. It was alleged that this fraud was committed from July 2004 until February 2006.

On 10 February 2006, the Revenue and Customs Prosecutions Office (“RCPO”) obtained Restraint Orders against both AA and SA, pursuant to sections 40 and 41 of the Proceeds of Crime Act 2002. At that time no charges had been brought against AA and SA. The orders were made by HHJ Pontius, sitting in private, ex parte, at the Crown Court in Blackfriars. The first Restraint Order was addressed to AA, SA and Sasaf. The second was addressed to SA, AA and Enjien. Both were endorsed with Penal Notices, warning that disobedience to the order would be a contempt of court, punishable by imprisonment in the case of an individual.

The trigger for the application and the grant of these orders was an interim application by SA and Enjien to the High Court, at the Birmingham District Registry, for an order that Barclays Bank Ltd carry out an instruction of Enjien, given on 23 January 2006, that Barclays transfer £520,000 from Enjien’s account with Barclays to Enjien’s account with FCIB, for value on 23 January 2006. That sum was said to represent a VAT refund. The National Criminal Intelligence Service (“NCIS”) refused to consent to this transaction because it was suspected that the money representing a VAT repayment from HMRC was part of a VAT fraud. The hearing of the application to the High Court was due to take place on 10 February 2006. The order was refused by the court.

The terms of the Restraint Orders are in standard form. Thus paragraph 3 of the Orders stipulates, first, that AA and SA and the respective companies must not remove from England and Wales any assets of the named individual and companies which were in England and Wales, whether in the names of those identified in the Order or whether solely or jointly owned. Secondly, they order that those identified in the Order must not “in any way dispose of or deal with or diminish the value of any of his assets whether they are in or outside England and Wales whether in his own name or not and whether solely or jointly owned”.

Paragraph 5 of the two Orders identifies particular assets which are the subject of the Orders, although the terms of the order make it plain that it is not limited to those assets. In the case of the Order against AA, SA and Sasaf, the order identifies (a) account number 101024222 held at Barclays Bank plc “and believed to be in the name of Sasaf Ltd”; (b) account number 02801 201964 “in the name of Sasaf Ltd held at First Curacao International Bank in Curacao”; and (c) AA’s interest in Sasaf. In the case of the order against SA, AA and Enjien, paragraph 5 is in identical terms, save that it refers to an account at Barclays Bank in the name of Enjien, an account of Enjien at FCIB in Curacao and SA’s interest in Enjien. Paragraph 5 of each order also states that the assets of the relevant company are to be treated as the assets of the “defendant”, ie. respectively AA and SA.

Just to ensure that the message is clear, paragraph 7 of each of the Orders stipulates that AA (in the one order) and SA (in the other order), must not remove from England and Wales or dispose or deal with or in any way diminish in value the accounts identified and his interest in the relevant company. Furthermore paragraph 7 stipulates that the relevant company (Sasaf in one case and Enjien in the other) must not remove from England and Wales or in any way dispose of or deal with or diminish in value the accounts and assets of the company already identified in the order.

Paragraph 9 of each order states that the “defendant” (ie. AA and SA respectively) must provide information to HMRC Prosecutions Office within 72 hours of service of the Order and set out all his assets and those under his control, whether within or outside England and Wales; whether in his own name or not and whether solely or jointly owned. The value, location and details of the assets have to be given. That has to be verified by a witness statement certified by a statement of truth to be made within 21 days of service of the Order. Paragraph 9(ii) sets out in detail all the information that has to be provided in the witness statement.

In each case, paragraph 11 orders the defendant “within 21 days after service of this order upon him [to] bring any moveable asset in respect of which he has an interest, which is outside England and Wales, to a location within England and Wales” and then to tell HMRC Prosecutions Office where it is located within 7 days of its arrival. If the asset is cash or credit in a financial institution then that has to be paid into an interest bearing account and the account holder, location and account number has to be notified to HMRC Prosecution Office within 7 days.

The Orders otherwise contain standard terms which need not be detailed here.

Once HMRC had obtained the Restraint Orders efforts were made to serve them on AA and SA. Mr Capon, a financial investigator for HMRC, went to AA’s home address in Preston but received no answer. He went to SA’s address in Preston where the door was opened by a man who said he was the father of AA and SA.

Mr Capon explained the purpose of his visit and was given a mobile phone number for SA. DS Entwhistle, who accompanied Mr Capon that day, called the number and a man purporting to be SA answered. He agreed to meet the officers at Preston Police Station that afternoon and said he would bring along his brother. Nobody turned up at the police station and further contact could not be made using the mobile number because the phone had been turned off.

However at 8pm the same day a call was made to Mr Capon by a man purporting to be SA. Mr Capon said that SA asked him what the order was that Mr Capon was trying to serve. Mr Capon explained to SA that the purpose was to restrict him from dealing or disposing of his personal assets and those of his company and his brother’s company. Having heard the purpose of the order the man claiming to be SA said he had an appointment with his solicitor. He said he would call Mr Capon to arrange an appointment with him for Monday 13 February 2006. No call was ever received on 13 February 2006. Mr Capon made several calls to SA’s number, but no answer was received.

On 14 February 2006 both AA and SA travelled to Dubai. AA did not return to the UK until August 2009, when he was arrested. SA remained out of the UK until July 2009, apart from a short visit in June 2007. He was arrested whilst in the UK and was then released on bail.

On 22 February 2006 HHJ Pontius initialled amended orders in respect of each appellant. There is one important amendment concerning AA’s Restraint Order. Paragraph 7 restrained SA, as a third party (as opposed to AA who had originally been named in the order) from dealing with Sasaf’s assets and its bank accounts. The change was made because SA was a co-director and co-signatory of Sasaf’s bank accounts.

On the same day the judge also granted an order for alternative service of both the original Restraint Order concerning AA and the revised order. The service was to be made by hand delivery or first class post to 38 Plover Street. Service was deemed to have taken place the day of delivery or the day after posting.

The judge also made an order for alternative service of the Restraint Order concerning SA (both the original and the corrected order). That was to be made by either hand delivery or post to Dass Solicitors or to 38 Plover Street. On 23 February 2006 both orders of 10 February and those of 22 February against SA were served by hand in accordance with the order for alternative service.

On 23 February 2006 both Sasaf and Enjien opened No 2 accounts at FCIB. A number of transfers totalling £16 million were made into the Sasaf No 2 account on 24 February 2006. It is alleged that AA caused or knowingly allowed debits of £16 million to be made to that account on the same day. Further transfers totalling £11 million were made into the Sasaf No 2 account on 27 February 2006. On the same day the funds were transferred into the Sasaf Ltd No 2 account also opened on 23 February 2006. Those funds were then transferred on to FCIB accounts held by two other companies: Malcolm Dilks Agencies Ltd and Texican Trousers.

The source of each of the credits into the Sasaf No 2 account was the No 2 Account of Enjien. That account had, in turn, been credited from sums which came from a company called Expo 21, which was incorporated in Northern Ireland. It was the Crown’s case in the contempt proceedings that this was clear evidence of AA and SA and their companies working together to defeat the Restraint Orders. It was these actions that formed the basis of the contempt of court allegations as they were said to constitute breaches of the Restraint Order.

The applications to commit both AA and SA for contempt of court were issued on 25 November 2009. The application against AA alleged that that he had disposed of or dealt with his assets, contrary to the terms of the Restraint Order, by debiting the Sasaf No 2 Accounts with FCIB on 24 and 27 February 2006 by, respectively, £16,397,037 and £11,202,843, which were said to be accounts over which he had control. It was further alleged that AA had failed to provide the information required by the Restraint Order and had failed to bring into the UK assets in which he had an interest as required by the Restraint Order.

The application against SA alleged that he had disposed of or dealt with his assets contrary to the terms of the Restraint Order by debiting Enjein’s No 2 account with FCIB on 24 February 2006 on four occasions. The sums debited were, in total, £16,377,045. It alleged that SA debited further sums totalling £11,201,843 on 27 February 2006 from the same account. It was also alleged against SA that he had failed to provide information as required by the Restraint Order against him and that he had failed to bring into the UK assets in which he had an interest as required by the Restraint Order against him.

Each application was supported by a large amount of evidence.

The applications to commit AA and SA for breach of the Restraint Orders of 10 and 22 February 2006 came before HHJ Karsten QC on 28 January 2010. Mr Sheikh, who appeared on behalf of SA before Judge Karsten as well as before this court, made two preliminary applications to the judge. First, he submitted that the court should stay or adjourn the contempt proceedings pending the outcome of the criminal investigation and, should the investigation lead to a trial, pending the conclusion of the trial. Mr Kazantzis, who appeared before the judge on behalf of AA, as he did before us, supported that application. Secondly, Mr Sheikh submitted that the contempt proceedings should be stayed because they were an abuse of the process of the court. That submission was based on the fact that the Crown had “delayed” issuing the contempt applications until November 2009, whereas HMRC had known about the transfers of sums to and from the Sasaf and Enjien No 2 accounts at FCIB in September 2008.

The judge gave a ruling on both points on 28 January 2010. He held that there was not such delay in the contempt proceedings that would cause any significant prejudice so that the proceedings would be unfair as against each of AA and SA. He therefore rejected the “abuse of process” submission.

On the question of staying or adjourning the contempt proceedings pending the outcome of the criminal investigation and possible trial, the judge had his attention drawn to the decision of the Court of Appeal, Civil Division, in Harris v Crisp (15 April 1992, unreported). The judge concluded, on the authority of that case, that (1) the court had a discretion to adjourn contempt proceedings when there were other related proceedings (“the principal proceedings”) pending; (2) the question to be decided was whether, on the facts of the case concerned, a real risk of serious prejudice which would cause injustice would result from going ahead with the hearing of the contempt proceedings when the principal proceedings were pending; (3) the discretion to adjourn should only be exercised in exceptional circumstances; (4) on the facts of this case, the issues that had to be considered on the application to commit for contempt were far removed from those that would have to be considered if there was a criminal trial. He therefore rejected the application to adjourn the contempt hearing.

The contempt proceedings were then themselves adjourned because of SA’s non-appearance at the hearing on 29 January 2010. The adjourned hearing started on 24 August 2010. At the start of that hearing, HHJ Karsten was asked to reconsider his ruling that the contempt proceedings should not be stayed or adjourned. He was asked to do so because the situation had now changed. Both AA and SA had, by then, been charged with conspiracy to cheat the revenue and with money laundering offences. It was argued on behalf of both AA and SA that if the contempt proceedings went ahead it would prejudice each of them because they would be denied their right not to give evidence at the trial of the principal proceedings if they had to give evidence in the course of the contempt proceedings.

The judge rejected this application. In relation to AA, the judge noted that AA had decided already and had indicated to the court, even before he had been charged with the principal offences, that he would not be giving oral evidence in the contempt proceedings. Therefore, the fact that he had subsequently been charged was an irrelevant change of circumstance.

In relation to SA, but also in relation to AA, the judge rejected the argument that each of the defendants in the contempt proceedings could only explain the transactions involving movements of funds into and out of the Enjien/Sasaf No 2 accounts with FCIB by disclosing his case in relation to the money laundering charges faced in the principal proceedings. The judge did so for two reasons: first, because each defendant had stated, in witness statements, that he had no involvement in the alleged movement of the funds that the Crown relied on as constituting the contempt of court. Therefore, there would be no need to go into evidence that might trespass into the territory covered by the money laundering charges. Secondly, the period with which the alleged money laundering offences are concerned pre-dated the alleged acts done in contempt of the Restraint Orders. Therefore, the defendants would not have to go into matters which preceded the allegations that they knowingly breached the Restraint Orders.

HHJ Karsten then heard evidence from Mr Capon and submissions on the substance of the application to commit for contempt of court. He gave judgment at the conclusion of the argument on 25 August 2010. Having concluded that both AA and SA were guilty of contempt, he heard mitigation and passed sentence the same day.

There were two broad allegations of contempt before the judge. The first was that both AA and SA had breached the principal orders in the court in relation to disposing or dealing with assets of Sasaf and Enjien. The second was that both AA and SA had failed to provide information in accordance with the Restraint Orders’ terms.

On the first broad allegation, the judge identified three issues for decision on the applications before him. First, was the Restraint Order served on the relevant defendant, AA and SA. Secondly, did each of AA and SA have knowledge of the terms of the Restraint Order that affected them. Thirdly, were either or both of AA and SA responsible for the movements of funds into and out of the Enjein and Sasaf No 2 accounts with FCIB. The judge recorded the fact that counsel for AA and SA both conceded before him that if their client knew of the terms of the relevant Restraint Order and was responsible for the movements of the sums into and out of the No2 accounts, then that client must be in breach of the Restraint Order: see transcript 18B-C.

Judge Karsten reminded himself that, as these were proceedings to commit for a criminal contempt of court, he had to be satisfied on the facts to the criminal standard. He made the following findings: (1) the conversation that Mr Capon had with a man who said he was SA on the evening of 11 February 2006 was indeed with SA: transcript 9C. (2) There was no service of the Restraint Orders until 23 February 2006, but alternative service was effected that day. However, even if there had not been service, if a person had full knowledge of a court order despite not being served in accordance with the relevant procedure rules, he cannot be allowed to flout the terms of the order by saying simply that he had not been served with the order: 19D. (3) Accepting the evidence of Mr Capon, SA knew of the existence of the Restraint Order against him and “at the very least of its general effect, namely that he was not to dispose of his own assets or those of the company, Enjien”: 21B and 23A. (4) He could not be satisfied, to the criminal standard, that when AA left the UK on 13 or 14 February 2006, he had the requisite knowledge of the terms of the Restraint Order against him: 25D-E. (5) However, both AA and SA knew “exactly” what was in Judge Pontius’ orders (plural) by the time that the two new No 2 Accounts were opened at FCIB on 23 February 2006 and the transfers to and out of those accounts were made: 25G-26G. There could be no other explanation for the opening of those accounts, on the assumption that it was AA and SA who effected the transactions. (6) The emails passing between SA on the one hand and parties to whom money eventually passed under the transfers and between AA and other companies to whom money eventually passed, all suggested that the brothers were “fully engaged and involved” in reversing the transactions which had given rise to the suspicions of HMRC: 27H-28B. (7) Each of AA and SA was involved in the payments of money to the recipient companies, viz Dilks and Texican Trousers: 29B. (8) It was “utterly far-fetched and too remote a possibility to deserve serious consideration” that someone other than AA and SA should have been responsible for the relevant transactions into and from the new No 2 accounts: 30H-31A. (9) Accordingly, AA and SA were responsible for the transactions giving rise to the allegations of disposals of assets of their companies in breach of the terms of the Restraint Orders: 31C.

On the second broad allegation, viz. the failure to comply with the orders to disclose the whereabouts of assets, the judge concluded that both AA and SA were very late in filing statements: 31E. But that breach was far less serious than the those concerning the movement of assets.

On the failure to repatriate assets, the judge found that both AA and SA had failed to comply with the terms of the Restraint Orders. He regarded that as a serious breach: 31G-32B.

The judge referred to R v Adewunmi [2008] 2 Cr App R (S) 326. He said that the principle stated in that case, that sentences required a punitive, coercive and deterrent element, were applicable to the present cases. He noted that AA and SA had not had the courage to plead guilty to the contempt offences. Both were equally responsible and the contempt was serious. Therefore each would be sentenced to 18 months imprisonment.

Mr Kazantzis on behalf of AA submitted, first, that the judge was wrong not to stay or adjourn the contempt proceedings until after the conclusion of the principal criminal proceedings. Secondly, Mr Kazantzis submitted that the judge was wrong to conclude that AA was aware of or had knowledge of the Restraint Order or its contents at the time of the transfers into and out of the Sasaf No 2 Account with FCIB. SA does not pursue that ground. Thirdly, Mr Kazantzis submitted that the judge erred in concluding that the Crown had proved, to the criminal standard, that it was AA who was involved in the transfers into and out of the Sasaf No 2 Account with FCIB. SA does not pursue that ground. We will call these grounds “the adjournment ground”, “the knowledge ground” and the “involvement ground” respectively.

On behalf of SA, Mr Sheikh now relies on only one ground of appeal. This is that the judge should have held that the contempt of court proceedings were an abuse of the process of the court. This was for two reasons. First, because of the delay between the time the Crown became aware of the contempt in September 2008 and the time the application to commit for contempt was made on 25 November 2009. Secondly, because SA suffered prejudice by having to decide whether or not to give evidence in the contempt proceedings, which could have prejudiced his position with regard to the impending trial. We will call that the “abuse of process ground”.

Contempt proceedings are separate from any other criminal proceedings that may be before the Crown Court in relation to parties accused of a contempt. Accordingly the general rule must be that contempt proceedings should be dealt with swiftly and decisively. However, where there is an application to commit a person for contempt of court because he is in breach of a court order and, at the same time, a criminal trial is pending against the person accused of a contempt, the court has a power to stay or adjourn the contempt proceedings until after the completion of the defendant’s criminal trial. That is clearly established in the decision of the Court of Appeal, Civil Division, in Harris v Crisp (15 April 1992): see the judgment of Neill LJ at page 5B of the transcript. Neill LJ’s judgment also establishes that the power to stay or adjourn should only be exercised exceptionally, where there is a “real risk of serious prejudice which may lead to injustice”: see transcript page 5F. In R v Barrington Payton [2006] EWCA Crim 1226, Pill LJ expressed the test slightly differently by saying that the issue was whether the fair trial of a defendant would be prejudiced by the cash forfeiture proceedings in that case going ahead before the principal criminal trial.

If an application to stay or adjourn the contempt proceedings to await the outcome of a criminal trial is made to a judge, the judge has to exercise a judgment. He must consider the issues that will arise on the contempt application and those that appear likely to arise at the criminal trial in the light of the prosecution case and the defendant’s case, so far as it is known at the time of the application to stay or adjourn the contempt hearing. The judge will have to consider also what evidence a defendant might wish to give in the contempt hearing. He must form a judgment on whether, in holding the contempt hearing, in which a defendant may decide to give evidence, that would give rise to a real risk of serious prejudice to the defendant in relation to his criminal trial which could thereby lead to injustice. In forming that judgment, the judge must take account of all relevant factors and must disregard all those that are irrelevant.

In this case, it is accepted that the judge identified the correct principles as set out in Harris v Crisp. But it is argued by Mr Kazantzis that the judge failed properly to apply them to the facts of this case. Mr Kazantzis submits that the acts of moving sums into the Enjien No 2 Account then onto the Sasaf No 2 account and then out of that account in the period 24 to 27 February 2006 must, on the prosecution’s case, form a part of the allegations against AA and SS of being party to a conspiracy to launder the proceeds of the alleged VAT fraud. That is because the prosecution allege that those actions were a part of a process whereby VAT repayments made to the “broker” company by HMRC (upon exportation of the supposedly high-quality goods) were then circulated back down the trading chain through the “buffer” companies and the “missing trader” company to a company in the UAE.

Mr Kazantzis then argued that, by continuing with the contempt hearing, the judge put AA in a position where he had to decide whether to give evidence in the contempt proceedings concerning the transfers on 24-27 February 2006 at a time when he had not seen the full prosecution case or the many thousands of documents relating to it. Mr Kazantzis submitted that AA was forced into a position at the contempt hearing of having not to give evidence so as to avoid the real potential unfairness of giving evidence on oath about matters that would affect his criminal trial before that trial took place because the transactions of 24-27 February 2006 which formed the basis of the contempt allegations were also central to the Crown’s case on the conspiracy to launder the VAT repayments. (It was common ground that any evidence that was given by AA in the contempt proceedings could be adduced in evidence at a later trial because it would not have been given under compulsion).

We are quite satisfied that the judge correctly applied the principles set out in Harris v Crisp to this case and that he arrived at the correct conclusion not to stay or adjourn the contempt proceedings. First, AA had made it clear from the start that he would not be giving oral evidence in the contempt proceedings and he did not change that stance. Secondly, for the purposes of the contempt hearing, it was the case of AA (and indeed SA) that he had no involvement in the transfers of funds between Enjien, Sasaf and Malcolm Dilks Agencies Ltd and Texican Trouser Ltd. Therefore AA could not attempt to explain why those transfers took place, because he knew nothing about it.

The judge relied on a third ground, which was that the movements of funds said to relate to the count of conspiracy to money launder took place before the transfers of 24-27 February 2006 so that any evidence given in relation to those could not, in any event, be prejudicial to the subsequent criminal trial. We are not sure that follows. But it is not relevant, because the judge’s conclusions on the first two points are correct and are sufficient to justify his decision not to stay or adjourn the contempt proceedings.

We therefore dismiss this ground of appeal.

Mr Kazantzis submitted that the judge’s conclusion that AA had knowledge of the contents of the Restraint Order by 23 February 2006 was an unreasonable one, in the sense that there was no sufficient evidence from which a judge could reasonably reach that conclusion of fact, so that he was sure. Mr Kazantzis submitted that the reasoning of the judge at page 25G to 26G is flawed. In that passage the judge noted: (1) that on 23 February 2006 the No 2 accounts of Enjien and Sasaf, controlled respectively by SA and AA, were opened at FCIB, an internet bank. (2) If AA and SA had opened them, the only reason for doing so was because they had become aware of the precise terms of the restraint orders which prohibited them from dealing with the No 1 accounts of their companies. (3) The “simultaneity” of the actions of the brothers convinced him to the criminal standard that both knew exactly what was in the Restraint Orders.

Mr Kazantzis submitted that the reasoning of the judge can only hold if he is right that the two brothers themselves were responsible for opening the No 2 Accounts of Enjien and Sasaf. If they were not, then there is no sufficient link to prove that they knew of the contents of the Restraint Orders. We accept that is so. But as the judge went on to find, independently, that AA and SA were responsible for opening the accounts and then organising the transfers, there can be nothing wrong with his conclusion that there was sufficient evidence to satisfy him, to the criminal standard, that AA and SA had knowledge of the Restraint Orders. We are satisfied, for reasons we give below, that the judge was correct to conclude that AA and SA did open those accounts. Therefore the judge’s conclusion as to knowledge cannot be impugned.

We therefore dismiss this ground of appeal.

The judge relied on emails between SA and AA on the one hand and other parties for his conclusion that both SA and AA had been involved in the transfers. Before the judge and before us, Mr Kazantzis submitted that it would be in the interest of other parties to fabricate these documents, in order to serve their own interests, in particular in relation to the conspiracy charges.

The judge considered that submission and he examined carefully all the evidence of the emails. He concluded that it would have been extremely difficult and complicated for a third party, who did not have authorised access to the Enjien and Sasaf accounts with FCIB, to engineer the transfers without the knowledge or consent of AA and SA. The judge noted that there was no evidence at all that anyone other than the appellants had access to those accounts, which were password connected. Moreover, why should someone open No 2 accounts for those companies at all, unless there was a conspiracy to implicate the appellants and to avoid suspicion of involvement in the VAT fraud conspiracy or money laundering conspiracy falling on others, of which there was no evidence at all.

We have concluded that the judge was perfectly entitled, on the evidence before him, to reach the conclusion that he was sure that it was AA and SA that set up the No 2 accounts and were responsible for the transfers into and out of those accounts. Mr Kazantzis’ submission that there had been no checks on the hard drives of computers to verify the veracity of the emails does not throw up sufficient doubt to be able to mount a successful challenge to the judge’s conclusion.

We therefore dismiss this ground of appeal.

Mr Sheikh, on behalf of SA, submitted that the 14 month gap between the Crown having knowledge of the creation of the No 2 accounts and the transfers and the application to commit for contempt in November 2009 is sufficient delay to amount to an abuse of process. Mr Sheikh also submitted that the contempt proceedings were an abuse of process because SA was unable to give evidence in the contempt proceedings that would have refuted the allegations made against him, because it would prejudice his position in the criminal trial to come.

On the first point the judge had held, in his first ruling concerning the abuse of process argument of the appellants, that the delay involved was “not particularly great”: see transcript of 28 January 2010 at 5A. He said that he was not satisfied that any significant prejudice had been caused to either AA or SA by that delay. Mr Sheikh has not presented to us any evidence or argument that leads us to doubt that conclusion of the judge.

The second argument covers much the same ground as Ground 1 above. At no time has SA indicated that he wished to put forward any case in relation to the contempt proceedings apart from a denial that he was involved in the transfers in any way. He has failed to establish that any prejudice arises from dealing with the contempt proceedings now, in advance of the criminal trial.

This ground is therefore dismissed.

In R v Adewunmi [2008] EWCA Crim 71, Davis J, giving the judgment of the court, said that there were normally two elements underpinning a committal for contempt, at least in cases where it was found that a defendant had been in breach of a Restraining Order prohibiting the disposal of assets. Those elements are, first, a punitive element to punish the deliberate breach (or breaches) of a court order; secondly, a coercive element in order to require the contemnor to doe what he is obliged to do under an existing order: see [12] of the judgment.

For AA, Mr Kazantzis submitted that although the first of those two elements was present in this case, the second was not. On the assumption, for present purposes, that the movement of the funds through the No 2 accounts and on to other companies had been, in his submission, an “unwinding” of the movement of VAT refunds, then there was nothing that AA could now do to repatriate those sums. It was not within his power to do so. Moreover, if the transactions were an “unwinding” of a business transaction, then it was no more; there had been no attempt to hide the money. Accordingly, the sentence of 18 months was manifestly excessive.

For SA, Mr Sheikh submitted that if SA had made repatriation of the funds then that would have been inconsistent with SA’s position that he had nothing to do with the transfers in the first place. It would be wrong to punish him for something that was yet to be determined at the criminal trial. Furthermore, if SA were responsible for the transactions, the acts were unsophisticated and obvious. Lastly, because the transactions constituted the “rewinding” of business transactions involving Texican Trousers Ltd and Malcolm Dilks Agency Ltd, in which neither appellant had an interest, it was unrealistic to believe that SA could purge his contempt by repatriating those sums.

In Adewunmi, the appellant had been sentenced to 18 months for contempt in failing to repatriate funds and in dealing with assets, contrary to the terms of a Restraint Order. The sums involved were about £1 million. The appellant admitted those breaches. The Court of Appeal reduced the sentence to 12 months imprisonment.

In our view the actions of both AA and SA were even more serious. The sums involved were many times greater. The breaches were deliberate and calculated to ensure the funds would be completely out of reach of British authorities. At no time was there any attempt to repatriate funds. The sentences of 18 months cannot be regarded as wrong in principle or manifestly excessive.

The appeal against sentence of both appellants is therefore dismissed.