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England and Wales Court of Appeal (Criminal Division) Decisions

You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Attorney General's References Nos 37, 38, 39, 48 and 49 of 2001 [2002] EWCA Crim 1286 (9 May 2002)
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Cite as: [2002] EWCA Crim 1286
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Neutral Citation Number: [2002] EWCA Crim 1286
No: 200101487/S3, 200101492/S3, 200101493/S3, 200101494/S3, 200101996/S3, 2001010997/S3

IN THE COURT OF APPEAL
CRIMINAL DIVISION

Royal Courts of Justice
The Strand
London WC2
Thursday 9th May 2002

B e f o r e :

THE VICE PRESIDENT
(LORD JUSTICE ROSE)
MR JUSTICE HUNT
and
MR JUSTICE KIETH
____________________

ATTORNEY GENERAL'S REFERENCES
Nos 37, 38, 39, 48 and 49 of 2001
(MALCOLM ADRIAN GELL)
(ALAN DOUGLAS SMITH)
(MARTIN WILLIAM CHALLIS)
(DAVID CLARK JOHNSTON)
(PAUL DAVID JENKINS)

____________________

Computer Aided Transcript of the Stenograph Notes of
Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2HD
Tel No: 0171 421 4040 Fax No: 0171 831 8838
(Official Shorthand Writers to the Court)

____________________

MR O POWNALL QC appeared on behalf of the Attorney-General
P GUEST appeared on behalf of the Respondent GELL
MR P ROWLANDS appeared on behalf of the Respondent SMITH
MR T PRICE appeared on behalf of the Respondent CHALLIS
MR S ENRIGHT appeared on behalf of the Respondent JOHNSTON
MR T LONG appeared on behalf of the Respondent JENKINS
____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

  1. THE VICE PRESIDENT: The Attorney-General seeks the leave of the Court, under section 36 of the Criminal Justice Act 1988, to refer sentences said to be unduly lenient. We grant leave.

  2. The offender, Gell, is 54, having been born in July 1947. He also appeals against his sentence. The offender, Smith, is 50, having been born in September 1951. The offender, Challis, is 53, having been born in December 1948. The offender, Johnston, is 60, having been born in June 1941 and the offender, Jenkins, is 27, having been born in April 1975.

  3. On 11th February 2001 each of the five offenders was convicted of a single count of conspiracy to cheat, after a trial before His Honour Judge Zucker QC at Wood Green Crown Court, which lasted for some three-and-a-half weeks. On 16th February 2001, Gell was sentenced to 4 years, Smith to 27 months and Challis to 12 months' imprisonment. On 12th March, after preparation of reports, Jenkins was sentenced to 18 months and Johnston to 6 months' imprisonment.

  4. The indictment related to a conspiracy, between the offenders and others, to cheat the public revenue of vast sums by way of unpaid excise duty and VAT, which ought to have been paid on spirits, beers and wines, during the period between March and September 1997.

  5. The introduction of the European single market, in 1992, removed restrictions on the movement of goods between European Union Member States. The allegations in this conspiracy centred on a licensed bonded warehouse, called Fort Patrick Warehousing & Distribution Limited, in Ipswich, where goods subject to excise duty were stored.

  6. Excise duty is chargeable on dutiable goods manufactured in the United Kingdom. But the payment is suspended, while the goods are stored in a bonded warehouse, until such time as they are released for domestic consumption, either within the United Kingdom or elsewhere in the European Union. Spirits, wines and beers stored at Fort Patrick were removed by between 8 and 10 independent groups referred to as 'cells', on the basis that they were being properly consigned to a bonded warehouse in Europe and, therefore, did not attract duty. The prosecution case was that this warehouse never traded lawfully and, in consequence, all its customers were permitted to divert goods without paying any excise duty. Of some 1500 withdrawals of goods during the period in 1997 to which we have referred, only a handful were not diverted without payment of duty. In fact the goods were not sent to another bonded warehouse in the European Union, as the paperwork in connection with the withdrawals purported to show, but they were diverted into the domestic market. In 1997, by way of example of the profits which are capable of being made, a bottle of whiskey would have cost £1 at the distillery but would have been subject to excise duty of £6 and VAT of about £7.

  7. The excise duty and VAT lost by reason of the activity of everyone connected with the Fort Patrick warehouse was in excess of £100 million, the largest such loss ever encountered.

  8. The investigation of these matters was known as 'Operation Stockade'. A number of other individuals involved in different 'cells' have been tried and sentenced as a consequence of operations known as 'Safe' and 'Zippy'. The sentences passed in relation to those operations ranged from 21 months to 4 years, the offences involved varying from conspiracy to cheat to substantive dealing with goods, some of those sentenced pleading guilty, some not guilty and the amount of duty lost, in relation to each of those operations, being, in the case of 'Operation Safe' £2 million, and in the case of 'Zippy' £2.2 million.

  9. So far as the operation in relation to which these offenders were involved is concerned, a man called Grant, following his conviction, was sentenced to a total of 9 years' imprisonment, by His Honour Judge Zucker. He had been convicted of two offences of being knowingly concerned in the fraudulent evasion of duty. He received consecutive sentences of 7 and 2 years' imprisonment. There had been a count of conspiracy to cheat on the indictment but the judge ruled, at the end of the prosecution case, that there was no case to answer in relation to that. The offences of which Grant was convicted were either way offences and, therefore, not susceptible to an Attorney's reference.

  10. Two co-accused, Nash and Sweeney, who were said to have been involved with Grant in the primary running of Fort Patrick were acquitted.

  11. The 'cell' of conspirators which included the offenders was known as the Boparan/Bajwa cell, after the names of the principal organisers. The duty and tax evaded was just under £22 million. Bajwa and Boparan both pleaded guilty. Bajwa was sentenced, on 30th July 1999 by His Honour Judge Maher, to 6 years' imprisonment, in relation to 'Operation Stockade', with 2 years consecutively in relation to a similar diversion fraud involving an evasion of £30 million, known as

  12. 'Operation Fajita'. This had taken place between November 1997 and February 1998 and involved a bonded warehouse called The London City Bond, to which the activities of Bajwa and those involved with him were directed following the closure of the Fort Patrick warehouse.

  13. Boparan appeared before Judge Zucker on 21st September 2000. He was sentenced, on 3rd October, to 5 years' imprisonment, for his part in 'Operation Stockade', that sentence being ordered to run consecutively to an 18 month term imposed for breach of his prison licence. Boparan had been released from prison in May 1997, having served a term of imprisonment for cheque fraud, very soon indeed before he became involved in these events. Of the 1500 consignments which left Fort Patrick, using bogus documentation, 194 were attributable to the offenders.

  14. The conspiracy with which this Court is presently involved was, in outline, that Boparan and Bajwa operated a number of fraudulent companies which purported to buy spirits to export to bonded warehouses in Spain. In fact, as we have indicated, the goods, when removed from the bonded warehouse, were diverted to the domestic market in the United Kingdom.

  15. The administrative accompanying documents in relation to the removal of these goods carried incorrect information. Drivers signed in false names. The documentation was forged with false stamps, purporting to be from foreign bonds and customs authorities and purporting to show safe receipt of the removed goods abroad.

  16. The role played by Gell in these matters was to arrange transport for the consignments from Fort Patrick. On some eight occasions, he actually drove the tractor himself.

  17. Smith, Challis and Jenkins were recruited by Gell. Gell hired, owned or insured the lorries involved in 162 of the removals from Fort Patrick and those removals represented a loss of approximately £17 million to the revenue.

  18. Smith lived with Gell's daughter. He provided telephones for use in the conspiracy and he assisted Gell in organising diversion of consignments. He was the most active of all the drivers used by Gell, and he drove consignments on 69 occasions between March and September 1997, and the amounts of revenue lost were in excess of £6.4 million. He signed in false names.

  19. The offender, Challis, was responsible for removing 25 loads between July and September 1997. Some £2.4 million of tax and duty was lost in relation those consignments. On the first two occasions he used his own name but thereafter he used a false name.

  20. Jenkins was the most active of the drivers, apart from Smith. He became involved because his father was an old acquaintance of Gell. He had an HGV licence. He was responsible for the removal of 55 consignments, between April and September 1997, resulting in a loss of revenue of £4.5 million. He signed in false names.

  21. Johnston was employed as a haulage contractor. A lorry hired by him made four removals of goods between the middle of March and the beginning of April 1997, and the loss of revenue, in relation to those transactions, was £367,000. He signed documentation in false names.

  22. On 8th October 1997, Gell voluntarily attended the custom house, with his solicitor. In interview he claimed he had met a man called Chris Davis a few months before who had invited him to Fort Patrick and elsewhere. He admitted having driven on occasions himself, but he claimed to be unaware of any evasion of duty. He was eventually charged in March 1998 and remained on bail throughout.

  23. The offender, Smith, was arrested on 30th September 1997, at home. When interviewed he said he had obtained work as a driver and had driven on a dozen occasions. He received instructions, he said, over the'phone from a man called Ben. He denied signing any documents. He was charged, on 26th March 1998, and he was on bail throughout.

  24. Challis was arrested on 31st March 1998, at home. In interview he accepted that, in September 1997, he had been employed to collect a number of loads from Fort Patrick. As far as he was aware they were for onward transit to the continent. He did not suspect illegality and he was paid £40 per trip.

  25. On 30th September 1997, Jenkins was seen driving off, at high speed, in a motorcar from a road haulage yard where a lorry was searched and documentation was found which included maps showing where a number of consignments from Fort Patrick were delivered. Jenkins was eventually arrested on 8th July 1998 and, in interview, declined to answer questions or provide handwriting samples. He was charged that day. His solicitor said at that time that he was not knowingly concerned in the evasion of the duty and could not read or write very well.

  26. The offender, Johnston, was arrested on 30th September 1997, at home. While customs officers were trying to gain access, a sum in excess of £47,000 in cash was thrown out of the rear window. A further £1,660 was found inside the house. Johnston said he threw the money outside because he did not know who was at the door. In interview, he declined to answer questions. He was charged on 30th April 1998 and made no reply.

  27. None of the offenders gave evidence at trial.

  28. On behalf of the Attorney-General, Mr Pownall QC submits that, in relation to Gell, there are a number of aggravating features. First, he played an essential and persistent role in organising transport, recruiting drivers and arranging for the movement of very large amounts of goods on some 162 occasions, with a revenue loss of £17 million. Smith was the most active of the drivers and played an essential and persistent role in driving 69 consignments with the loss of £6.4 million. He also assisted the offender, Gell, in organising transport facilities. Challis played an essential and persistent role in driving 25 consignments with a loss to the revenue of £2.45 million. Jenkins played an essential and persistent role, driving 55 consignments, over a period of 5 months, with a loss to the revenue of £4.5 million and Johnston played an essential role as a driver of some four consignments, over a period of about a month, resulting in the loss of £367,000.

  29. Mr Pownall concedes that, although the conspiracy to which these offenders were a party, was but one of several conspiracies in relation to Ford Patrick, the judge was entitled to pass sentence on the basis of a revenue loss of £22 million, rather than on the total overall loss of £100 million.

  30. The submission is made by Mr Pownall that large profits were made from this conspiracy and, inevitably, honest traders must have suffered, through their inability to compete with the artificially reduced prices which would result, on the home market, from the sale of these improperly removed goods.

  31. So far as the allegation of delay advanced on behalf of the offenders is concerned, following their arrests, charges were made in January 1998 and, in April 1999 the case was transferred to the Crown Court. In 2000, a 537 page case statement was presented by the prosecution and a date was fixed for trial in early September 2000. Thereafter, the judge, who was to try the matter unhappily had an incident and had to be replaced. It was thereafter that orders for severance of Grant and others, from these offenders, was made by the trial judge. Mr Pownall submitted that there had been no co-operation from the defence, in that there had been submissions in relation to abuse, arising from delay and in relation to disclosure and PII matters, all of which had occupied a good deal of time.

  32. His Honour Judge Winstanley, who had been the original judge, had indicated that defendants would get a discount if they cooperated in the course of the trial. The trial, as we have said, occupied only some three-and-a-half weeks once the other accused had been severed and separately tried, as against an initial estimate which has been expressed, in this Court, as varying between 5 and 9 months.

  33. Mr Pownall submits that the investigation of these matters necessarily involved a considerable lapse of time to collate surveillance evidence, telephone evidence and the documentary evidence in relation to the removal of the goods, all of which were integral parts of the prosecution case.

  34. So far as mitigating features are concerned, Mr Pownall submits that there are none in relation to Gell. In relation to Challis, he was of previous good character. He began by signing documents in his own name, indicating that he did not initially appreciate the nature and extent of the conspiracy and his role was, in any event, subordinate to that of Gell, Smith and Jenkins. So far as Smith is concerned, he was not one of the principal organisers of the conspiracy. In relation to Johnston, he was aged 59 and at the time and was treated by the judge as a man of previous good character. His haulage business had gone into decline in the mid 1990s when he had lost his main supplier and he was only involved in four removals, albeit by pantechnicon. In relation to Jenkins, Mr Pownall drew attention to the mitigation lying in the fact that the offender was only 21 when the offences were committed. He was of previous good character and he had an IQ of only 85.

  35. Mr Pownall submits that the level of sentences passed by the learned judge was of the order of half of what was appropriate in the light of the guidelines suggested by this Court in R v Dosanjh [1999] 1 Cr App R(S) 1072. Mr Pownall also referred to R v Towers [1999] 2 Cr App R(S) 110 and to R v Flaherty and McManus [2000] 1 Cr App R(S) 250.

  36. On behalf of Gell, Mr Guest stressed that these sentences were passed by an extremely experienced judge, who had sentenced Boparan, following his plea of guilty, and who was aware of the sentencing remarks made by judge Maher when he sentenced Bajwa. The learned judge was well aware of the authority of this Court in Dosanjh. Mr Guest stresses that the offender, Gell, was treated by the judge as being a man of good character. His role had been to provide drivers and transport, in relation to 160 of the 190 loads. No doubt he had profited, personally. But, on the other hand, no confiscation proceedings had been taken against him because he had no apparent assets and he had not played any part in the preparation of paperwork, or the collection of cash.

  37. So far as Gell's appeal against sentence is concerned, that is put on the basis that the learned sentencing judge ought to have taken into account, in determining the sentence which Gell should serve, a period of 21 weeks which Gell had spent in custody, in relation not to the Stockdale matter as to which he was throughout on bail, but in relation to the Fajita conspiracy in relation to which, at trial, no evidence was offered against him, following an order by the trial judge for disclosure of certain information.

  38. The submission is made that, because, by virtue of section 67 of the Criminal Justice Act 1967, the 21 weeks spent in custody does not count towards the Stockdale sentence, the learned judge ought to have taken that into account and ought, if we understand Mr Guest's amended submission appropriately, to have been reflected in some 8 or 10 months' deduction from what otherwise would have been the appropriate sentence.

  39. On behalf of Smith, Mr Rowlands points out that he was treated by the judge as being a man of good character. He has a 4 year old daughter from whom he has been separated, by reason of his incarceration. He submitted that, although the judge did not say, in sentencing these offenders, that he was starting from the point of 5 years imposed in relation to Boparan, that was to be regarded as an appropriate inference. Mr Rowlands submitted that no part of the delay which has occurred in this case was attributable to the defendants. Furthermore, the offender Smith has been released some 3 months ago and is now working. Mr Rowlands put before this Court a favourable reference from Smith's employer.

  40. On behalf of Challis, Mr Price pointed out that he was released in June 2001. His role only occupied about 2 months of the conspiracy because he did not join until July 1997. He was only concerned with the movement of goods. He initially did not join dishonestly, as evidenced by his signature in his own name on the first two consignments. He was a 52 year old man at the time, of previous good character, always in employment and, for him, a 12 month sentence was, as a first experience of prison, an entirely adequate deterrent. He, too, is in employment. Mr Price submitted that the sentence on Challis was lenient but not unduly so.

  41. On behalf of Johnston, Mr Enwright pointed out that he was released in late April 2001. The only lack of co-operation properly attributable to the defendants in general and Johnston in particular, was their failure to plead guilty. Mr Enwright submitted that, certainly so far as Johnston was concerned, responses had been made swiftly and skeleton arguments lodged timeously when required Mr Enwright's participation in the abuse of process argument was limited to a speech of five minutes and his speech in the trial was not a great deal longer. So far as the £47,000 discarded by Johnston, at the approach of the officers is concerned, Mr Enwright pointed out that the prosecution had merely relied on this as evidence of a guilty mind; they had not suggested that he owned the whole of that amount.

  42. On behalf of Jenkins, Mr Long pointed out that he was tagged in September 2001 and released from his sentence on 18th November 2001. For some reason he had not been arrested until some 9 months after most of the other defendants. He has a poor command of reading and writing. His involvement in this conspiracy resulted from his first job, using his HGV licence. Since his release, he has been in full-time employment and a reference is forthcoming in relation to him.

  43. So far as Gell's appeal against sentence is concerned, that is dismissed. Whether or not the period of 21 weeks which he spent in custody in relation to the Fajita conspiracy should be credited against the sentence which the judge thought otherwise appropriate, was entirely a matter within the judge's discretion. He specifically considered the point, when invited to do so. He did not misdirect himself. He was entitled not to take that period into account. Accordingly, Gell's appeal against sentence is rejected.

  44. Turning to the Attorney-General's reference, the sentences passed on Challis, Johnston and Jenkins were, in our judgment, all lenient and, in the case of Challis and Jenkins, probably unduly so. We doubt whether, in Johnston's case, 6 months, for a 60 year old of previous good character, can properly be characterised as unduly lenient, in the light of the minor role which he played.

  45. The sentences passed on Gell and Smith were, in our judgment, unduly lenient. We would have expected, in the court below, a sentence in the region of 7 years for Gell and, in the region of 4 years for Smith. We are undeterred from that conclusion by the sentence of 5 years passed on Boparan. His sentence reflected circumstances of mitigation, including his plea of guilty, which are not open to any of these offenders.

  46. The crucial question is whether any of these sentences should now be increased by this Court. We bear in mind that it is now four-and-a-half years since the offence was committed and more than 12 months since the offenders were sentenced and the Attorney-General's reference lodged. Four of the offenders, that is all save Gell, have now been released. Smith was released 3 months ago and is in employment, with a favourable reference from his employer. Challis was released almost 12 months ago, and is likewise in employment. Jenkins was released, fully, 6 months ago having been tagged from September 2001 and he is in employment with a favourable reference from his employers.

  47. We bear in mind that this has been the first effective experience of prison for the offenders, leaving aside for the moment Gell. Any sentence which we thought appropriate in the court below, in relation to Smith, Challis and Jenkins, would have to be discounted, in this Court, both for double jeopardy and for the fact that these three would now, if their sentences were increased, have to return to prison. In these circumstances, any sentence which we now imposed on them, could not, as it seems to us, properly be more than a few months greater than that which was imposed by the trial judge. That, in our judgment, would not be a proper exercise of the discretion vested in this Court on Attorney-General's references.

  48. That leaves Gell. If his case were being considered alone, although, as a consequence of double jeopardy, a sentence of the order of five-and-a-half or 6 years might well be appropriate in this Court, in relation to him, he is not being considered alone. In our judgment, it would necessarily create a justifiable sentence of grievance on his part if his sentence, alone among the four offenders who received, as it seems to us, certainly or probably, unduly lenient sentences, were to be increased. That being so, in the exercise of our discretion, notwithstanding the leniency and undue leniency of the sentences to which have referred, we do not increase the sentence on any of these offenders.

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