AG v Bhojwani

JurisdictionJersey
CourtRoyal Court
JudgeJ. A. Clyde-Smith,Jurats Le Breton,Morgan,Liddiard,Falle,Le Brocq
Judgment Date25 June 2010
Neutral Citation[2010] JRC 116
Date25 June 2010

[2010] JRC 116

ROYAL COURT

(Samedi Division)

Before:

J. A. Clyde-Smith, Esq., Commissioner, and Jurats Le Breton, Morgan, Liddiard, Falle and Le Brocq.

The Attorney General
and
Raj Arjandas Bhojwani

M. T. Jowitt, Esq., Crown Advocate.

Advocate J. D. Kelleher for the Defendant.

Authorities

Proceeds of Crime (Jersey) Law 1999.

AG v O'Brien and Others [2003] JRC 137A.

AG v Michel [2007] JRC 120.

R v Monfries [2004] 2. Cr. App. R. (S) 3.

R v Basra [2002] 2 Cr. App. R. (S) 100.

R v Sarmiento [2003] 2 Cr. App. R. (S) 9.

R v Sabharwal [2001] 2 Cr. App. R. (S) 81.

R v El-Delbi [2003] EWCA Crim 1767.

R v Adams [2009] 1 WLR 301.

R v Bori and Others (7 th June 2010).

R v Clark [1998] 2 Cr. App. R. (S) 95.

R v Ozakpinar [2009] 1 Cr. App. R. (S) 8.

AG v Bellows 1999/28.

Corruption (Jersey) Law 2006.

Harrison v AG [2004] JCA 046.

Bhojwani v AG [2009] JCA 115A.

Sentencing by the Superior Number of the Royal Court, to which the accused was remanded by the Inferior Number on 28 th May, 2010, following conviction at (Jurat trial) on the following charges:

2 counts of: Converting the proceeds of criminal conduct, contrary to Article 34(1)(b) of the Proceeds of Crime (Jersey) Law 1999 (Counts 1 and 3).

1 count of: Removing the proceeds of criminal conduct from the jurisdiction of Jersey, contrary to Article 34(1)(b) of the Proceeds of Crime (Jersey) Law 1999 (Count 2).

Age: 52.

Plea: Not guilty.

Details of Offence:

The defendant, an Indian national, made a criminal fortune of almost US$40 million selling vehicles to the Nigerian Government under two separate contracts in 1996 and 1997 through a Panamanian shelf company, named Tata Overseas Sales and Services, (TOSS), which was in reality a front for him personally. The true purchase prices of the vehicles was inflated by between 400 and 500% at the behest of the then President of Nigeria, General Sani Abacha, and a second Nigerian government figure, a Colonel Mohammed Buba Marwa. As a consequence the defendant charged Nigeria some US$184 million for vehicles which were in truth worth about US$38 million. He concealed the overcharge by falsely representing that his front company, Tata Overseas Sales and Services, was part of Tata India, the manufacturer of the vehicles, and was selling to Nigeria at genuine manufacturer's prices. The entire inflated cost over both contracts was paid on President Abacha's order to bank accounts at Bank of India Jersey, (BOIJ), held in the name of the defendant's front company TOSS. From the Jersey accounts of TOSS and a second Panamanian front company called Britannic Trade Corporation, (BTC), the defendant then paid almost US$100 million in bribes from the sale proceeds to coded and company bank accounts in Switzerland and elsewhere which he knew were beneficially owned by Abacha family members and by Colonel Marwa. This, in total, was the criminal conduct in Nigeria which gave rise to the defendant's own proceeds of crime – namely the US$40 million profit which he personally made over both fraudulent contracts.

The defendant kept his US$40 million proceeds of crime at BOJI from 1997 until the 20 th October, 2000, when the Financial Times ran a major exposé on Nigerian government corruption under President Abacha in which it revealed that the Swiss authorities had launched a money laundering investigation and had identified the coded Swiss accounts of the Abachas into which the defendant knew he had paid millions in bribes in 1996. The FT reported that whilst the UK was lagging behind in combating money laundering, some offshore jurisdictions were leading the way, and that “even Jersey has frozen an account it identified on its own initiative”. That news was repeated on the front page of that day's edition of the Jersey Evening Post.

In response to the news of the money laundering investigations, the next working day, Monday 23 rd October, the defendant committed the first of three money laundering offences by converting the balances of the TOSS and BTC bank accounts at BOIJ into freely negotiable bankers' drafts in a total sum of $43.9 million. He then committed the second money laundering offence by having the drafts couriered out of Jersey. The drafts remained out of the banking system until 2 nd November when the defendant committed the third money laundering offence by converting the drafts by paying them into the accounts at BOIJ of three different front companies owned by him, rather than into the TOSS and BTC accounts from which the drafts had come. Each conversion and the removal was done with the purpose of avoiding a Jersey prosecution and/or a Jersey confiscation order.

Details of Mitigation:

Of the offences themselves: (i) not professional money laundering, but a fairly crude, knee-jerk reaction to breaking news, and (ii) committed over a short period of time.

Personal mitigation:- (i) first convictions; (ii) the defendant had a record of charitable works in the Third World and (iii) many referees spoke very well of him.

Aggravating features:-

(i) the Court was entitled in determining the appropriate sentence for the money laundering offences to have regard to the underlying criminality, which was substantial government corruption to the detriment of a Third World country and its impoverished people; (ii) the defendant had targeted Jersey to receive his proceeds of that corruption, to conceal it and ultimately to launder it when the risk of discovery arose. (iii) The importance to Jersey of its finance industry made money maundering offences all the more serious.

Previous Convictions:

No previous convictions.

Conclusions:

Starting point 12 years.

Count 1: 9 years' imprisonment.

Count 2: 9 years' imprisonment, concurrent.

Count 3: 9 years' imprisonment, concurrent.

Total: 9 years' imprisonment.

Confiscation Order to be adjourned.

Sentence and Observations of Court:

Starting point 8 years.

Count 1: 6 years' imprisonment.

Count 2: 6 years' imprisonment, concurrent.

Count 3: 6 years' imprisonment, concurrent.

Total: 6 years' imprisonment.

In light of the sentence of 6 years' imprisonment passed in the case of AG v Peter Michel, who could properly be described as providing professional money laundering services over many years, the Court could not accept that this defendant's short-lived and amateurish laundering could attract a higher sentence, notwithstanding that each money laundering case had to be assessed on its own individual facts and that the English Court of Appeal had expressly avoided laying down sentencing guidelines. Nonetheless this was very serious criminality which required a commensurately substantial custodial sentence both as punishment and as a deterrent to others.

Confiscation Order to be adjourned.

Deportation Order to be adjourned.

THE COMMISSIONER:
1

The defendant has been found guilty of three counts of converting and removing the proceeds of criminal conduct, contrary to Article 34(1)(b) of the Proceeds of Crime (Jersey) Law 1999 (“Proceeds of Crime Law”) after a trial of 6 weeks in duration.

2

In 1996 and 1997 the defendant engaged in conduct in Nigeria which, if it had occurred in Jersey, would have constituted criminal conduct as defined in the Proceeds of Crime Law. The defendant had sold, to Nigeria, vehicles at prices inflated by some 4–500%, namely for a consideration of approximately $184 million, but in truth the vehicles were worth less than $40 million. These transactions were undertaken with the country's then military dictator, the late President Abacha, and the country's Defence Advisor to the United Nations, Colonel Marwa. The proceeds were paid to accounts controlled by the defendant in Jersey, out of which approximately $100 million was paid to accounts in Switzerland, connected with President Abacha and Colonel Marwa. The defendant's share was $40 million which he retained in accounts in Jersey. Of that sum the defendant asserts that approximately $25 million represented the true profit to him. The prosecution describes these transactions as little more than theft from the public purse of Nigeria and on a grand scale.

3

The money laundering offences, of which the defendant has been found guilty, arose in this way. On the 20 th October, 2000, the Financial Times published a profile exposé on the late President Abacha's corruption. The articles revealed that the Swiss authorities had identified the accounts connected with General Abacha into which millions of dollars from Nigerian government corruption had flowed, which the defendant would have known included sums paid through his company. Whilst London was lagging behind the game in combating money laundering, several offshore jurisdictions were, by contrast, being highly proactive and it was reported that even Jersey had frozen an account discovered on its own initiative. That claim and news were featured on the front page of the Jersey Evening Post on the same day.

4

The risk to the defendant was, the prosecution say, obvious and on the next working day he converted all the proceeds of the accounts he controlled at the Bank of India in Jersey, totalling $43.9 million, into freely negotiable drafts, (Count 1), which he then had delivered to London, (Count 2). It is relevant to note, as Mr Kelleher pointed out, that according to the evidence of the forensic accountant, called at the trial, some 78.2%, i.e. $34 million, was traceable to the two contracts in 1996 and 1997. Applying the exchange rate applicable in 2007, that equates to some £20 million. The sums involved remained out of the banking system for some 12 days before the defendant delivered the bankers drafts back to Jersey to be credited to accounts in the names of different companies which he controlled (Count 3). The Inferior Number, by its verdict, found that each of these transactions had been undertaken for the purposes of avoiding prosecution for an offence in Jersey,...

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