England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		23 October 2014

1. LORD JUSTICE PITCHFORD: This is an appeal by Mubarak Ismail Patel, Habibur Rahman Maroof and Rizwan Desai against the decision of District Judge Goldspring, sitting at Westminster Magistrates' Court on 11 July 2014, to order their extradition to Germany under section 21(3) of the Extradition Act 2003. We have been assisted by the submissions of Mr Hawkes on behalf of Patel, Mr Stansfeld on behalf of Maroof, and Mr Cooper on behalf of Desai.
2. The principal ground of appeal is common to each of the appellants. They contend that the European Arrest Warrant ("EAW" or "warrant") was defective in that it failed to provide the particulars required by section 2(4)(c) of the Act. Mr Patel also contends that extradition would be incompatible with his Convention rights within the meaning of section 21(2) of the Act.
3. The EAWs were issued by the Chief Prosecutor for Nurnberg-Furth on 12 July 2012. They were certified by the Serious Organised Crime Agency in the cases of Desai and Patel on 13 October 2012, and in the case of Maroof on 6 February 2013.
4. In order to constitute an arrest warrant for the purposes of Part 1 of the Extradition Act 2003, by section 2(2) the warrant must contain the information required by section 2(4). That information includes:

"(c) particulars of the circumstances in which the person is alleged to have committed the offence, including the conduct alleged to constitute the offence, the time and place at which he is alleged to have committed the offence and any provision of the law of the category 1 territory under which the conduct is alleged to constitute an offence."

5. In their description of the circumstances of the offences, the warrants were identical. In the English translation the particulars may be summarised as follows:

(1) The requested person is a member of a group which combined for the purpose of carrying out a "carousel" VAT fraud while trading or purporting to trade in electrical power. The object was to make fraudulent claims to input tax.

(2) The companies involved in the carousel in Germany were ASM Trading GmbH Capital Inc (headquarters in Berlin) ("ASM"), Energy Plus GmbH (headquarters in Nuremberg and Berlin) ("EP"), and ABM Online GmbH (headquarters in Munich) ("ABM").

(3) ASM was the "missing trader". ASM purported to issue invoices whose effect was to enable EP and ABM to make claims for input tax. The invoices were false because the underlying business was fictitious. There were purchases of electricity but they were sourced outside the EU. ASM did not submit monthly VAT returns as they were obliged and on which they would have been liable to pay VAT to the German tax authority. The warrant lists five invoices for the months of January to May 2011 inclusive purportedly issued by ASM to EP. The total sum invoiced was 19.4 million euros, of which the VAT component was 3.4 million euros.

(4) Using the fictitious invoices EP submitted false claims for input tax. As I have said, EP in fact made purchases of energy from other countries and sold on in particular to ABM. The electricity was resold by ABM into other countries VAT free, enabling ABM falsely to claim the input tax from the German tax authority.

(5) The loss to the German tax authority was 1.8 million euros.

6. Patel's conduct was identified in his warrant as follows:

"Mubarak Ismail Patel was a member of this organisation, which controlled the operation of this VAT carousel fraud from Great Britain. Here he associated at least with the persons with the aliases 'Pablo' and 'Roger' in order to evade VAT taxes on a Europe-wide scale by means of such carousels. Within the organisation, which is structured and managed as a concern, the accused has the alias "Professor" or "David". Within the organisation, the accused was responsible for the planning and execution of each single transaction, as well as for keeping the permanent contact with the members of the organisation in Germany."

7. Maroof's conduct was identified as follows:

"Maroof was a member of this organisation, which controlled the operation of this VAT carousel from Great Britain. Here he associated at least with the persons with the aliases 'Pablo', 'Roger' and 'Professor/David' in order to evade VAT taxes on a Europe-wide scale by means of such carousels. The accused Maroof was one of those responsible for the company Envirigo AB, with headquarters in Sweden, which was conductive towards the carousel transactions by supplying Energy Plus GmbH with electricity. Together with the members of the organisation in Germany, the accused Maroof also organised the numerous invoice chains of the carousel."

8. Desai's conduct was identified as follows:

"Rizwan Desai was a member of this organisation, which controlled the operation of this VAT carousel from Great Britain. Here he associated at least with the persons with the aliases 'Pablo' and 'Professor/David', in order to evade VAT taxes on a Europe-wide scale by means of such carousels. Within the organisation, which is structured and managed as a concern, the accused has the alias 'Roger'. Within the organisation, the accused was responsible for the planning and execution of each single transaction, as well as for taking important decisions within the carousel in Germany."

9. The relevant provisions of German law specified in each of the warrants are described as:

"Incitement of aiding and abetting towards tax fraud in one particularly serious case in 8 cases and attempted tax fraud in one particularly serious case, each case in coincidence which membership in a criminal organisation.

In accordance with paragraphs 369, 370 Section 1 No. 1 and 2, Section 3 No. 1 and 5 General Fiscal Law, paragraphs 129 Section 1, 22, 23, 25, Section 2, 52, 53 Criminal Code."

10. The warrant explains that paragraph 370 of the General Fiscal Law identifies tax crimes punishable under German tax laws. Those on which the prosecutor relies are listed in the warrants. By paragraph 370(3), those who commit such crimes as members of a group formed for the purposes of furnishing the revenue authorities with incorrect or incomplete particulars concerning matters of substantial significance to taxation will be liable to imprisonment for a period of 6 months to 10 years.
11. The appellants argued before the District Judge that the particulars offered under section 2(4)(c) were insufficient because (1) their criminal conduct was not identified, (2) particulars of the nine offences allegedly committed were not provided, (3) the operation of the criminal enterprise was not explained, and (4) the relationship between the companies and the appellants was not specified.
12. In oral argument before this court, counsel concentrated upon the second argument, that particulars of the nine offences were not provided; and, secondly, that the participation of each appellant was not specified in relation to each of those nine offences.
13. District Judge Goldspring rejected these arguments. He accepted that there were nine discreet substantive offences alleged under paragraph 370. In other words, this is not an allegation of conspiracy to cheat the public revenue or a conspiracy to defraud, as known to the common law of England and Wales. On the other hand, it is clear that the warrant relies upon a joint enterprise between each of the appellants and others to carry out the fraud by means of nine discreet substantive offences. It followed that the particulars required were of the substantive offences allegedly committed. At section E of each warrant the words "this warrant relates to in total nine offences" appears. The judge identified the nine offences as follows:

(1) Charges 1 to 5 inclusive: At paragraph 20 of his judgment, the District Judge said: "20. Thus 5 discreet offences for each of the returns issued by ASM Trading GmbH as detailed in the table in box (e), which includes a date of return along with the amount claimed". This I consider to be a misreading by the judge of the words used in the warrant or a slip in the preparation of his judgment. The warrant states not that returns were submitted but that they were not. The source of the judge's finding is the statement in the warrant that ASM's invoices did not represent genuine trading and the following: "As was intended from the outset, ASM Trading GmbH did not fulfil its obligations to turn in monthly turnover tax advance returns in and the indicated VAT [ie in the invoices] was not paid to responsible Finanzamt Berlin fûr Körperschaften (Tax Revenue Office for Companies in Berlin) in the period for January to May 2011". It is clear, in my view, that the offence properly stated is ASM's fraudulent failure to submit VAT returns on which VAT would have been accountable for the period January to May 2011.

(2) Charge 6: EP's fraudulent claim for input tax dated 5 May 2011. The further source of the judge's finding is the statement in the warrant: "Energy Plus GmbH asserted a claim for the input/pretax from these invoices in the first quarter of 2011 (VAT return dated 05.05.2011) and had already included the invoices in its accounts in the second quarter in order to be able to claim the input/pretax".

(3) Charge 7: Late VAT return submitted by EP on 11 July 2011. The further source of the judge's finding is the statement in the warrant: "Contrary to duty, a VAT return was not turned in by Energy Plus GmbH for the second quarter [April, May and June] 2011 until 11.07.2011, [as a result] the approval of the tax revenue office for the turnover tax advance return in the first quarter of 2011 was not required".

(4) Charge 8: ABS's fraudulent claim for input tax dated 8 July 2011. The further source of the judge's finding is the statement in the warrant: "ABM Online GmbH also claimed for input/pretax from the invoices issued by Energy Plus GmbH in its VAT return dated 14.04.2011 for the first quarter of 2011 and dated 08.07,2011 for the second quarter of 2011, although those responsible were aware of the fact that the respective transactions were electricity trading purchases from Energy Plus GmbH intended to make business from the VAT carousel and that it is illegal to draw input/pretax from such invoices. The tax revenue office denied the approval of the turnover tax advance return of the first quarter 2011. No approval was required for ABM Online GmbH's advance return of the second quarter 2011".

(5) Charge 9: ABM's fraudulent attempt to claim input tax for the first quarter of 2011 dated 14 April 2011. The source of the judge's finding is the same extract from the warrant as that which supported charge 8.

14. The District Judge found that sufficient particulars had been given of the conduct that constituted the appellants' complicity and participation in the fraudulent enterprise.
15. The appellants repeat the objections taken before the District Judge. It is argued that the information in each warrant fails to identify the time, date and place of the offences and there is not in respect of each such offence a statement of the nature of the appellant's participation.
16. The principles to be applied to the issue raised are by now well known. It is to be acknowledged that the purpose of Part 1 of the Act was to simplify the extradition procedures between the states that were parties to the Framework Decision. At the same time, what is involved is the liberty of the subject. The right of the accused to know what he is facing should not be subordinated to expediency.
17. The appellants rely upon several statements of principle to the same effect, among them the observations of Moore-Bick LJ in Sanjay Dhar v National Office of the Public Prosecution Service, The Netherlands [2010] EWHC 697 (Admin) at paragraph 117:

"Although I accept that the warrant need not contain highly detailed information of the kind that one might expect to find in a civil pleading, it must contain enough information to enable the requested person to understand with a reasonable degree of certainty the substance of the allegations against him, namely, what he is said to have done, when and where and also, in a case where knowledge of particular matters is an essential ingredient of the offence, sufficient information to enable him to understand why it is said that he had the necessary knowledge."

18. One of the purposes of particularity is to enable the accused person to take objection, if having been extradited to the requesting state, he is required to face a different case. Vague and all-encompassing allegations are embarrassing to the proper interests of the accused. Statements to this effect were made by King J in Dhar at paragraph 68 and Calvert-Smith J in Kopycki v Poland [2012] EWHC 744 (Admin) at paragraph 9.
19. The result of the application of these principles in the individual case must, it seems to me, depend upon an examination of the information provided in the particular warrant under consideration. I therefore turn to examine the criticisms made of the District Judge in the present case.
20. First, it is contended that the District Judge was wrong to search the particulars to see whether he could discover nine substantive offences. It is argued that the District Judge's conclusions were creative rather than the result of strict analysis. While I have accepted the mistake made by the District Judge in paragraph 20 of his judgment, I do not accept the argument that the offences were not properly particularised. I agree that it would have been preferable had the warrants specified under headings the facts relied upon in support of each of the allegations made but it does not follow that because the formatting of the warrant is confusing the particulars of offences are inadequate. I have already identified material on which the judge relied to identify the offences, subject to the correction to charges 1 to 5. The judge approached the averments made in the warrant sequentially and identified without apparent difficulty the conduct in respect of which the nine charges depended. In my judgment, the particulars are replete with the information necessary to align the allegations of conduct with the charges brought. I emphasise that the conduct to which I am referring is the conduct of the companies.
21. Second, it is submitted that since the charges are substantive it was necessary for the prosecutor to identify the facts that constituted participation by each appellant in each substantive offence. I accept that in some circumstances this will be necessary. I do not accept that it was necessary on the facts of this particular case. The allegation is that each of the companies identified as participating in the fraud was used as a vehicle for the fraud as a result of the criminal agreement between the appellants. Using false pseudonyms, Patel and Desai controlled the operation from the UK. Patel organised the false transactions and coordinated the activities of the participants. Patel and Desai were involved in the planning of the German transactions. Maroof was responsible for the supply of non-EU electricity to the conspirators. He was also implicated in the creation of false invoice chains. It is, in my view, important to distinguish between the particulars of the conduct alleged and the evidence that will be adduced to prove that conduct. The allegation here is that it was the appellants who were manipulating the companies to commit the individual offences to which I have referred with the ultimate object of defrauding the German tax authority of input tax. The evidence in support of these assertions as to conduct either will or will not establish that the appellants controlled the activities of the German and Swedish companies but it seems to me that there can be no misunderstanding as to the allegations made. In summary, it is alleged that the appellants controlled the activities of the companies that, in turn, failed to make returns, or alternatively made false returns, to the German revenue authority with the intention of making fraudulent claims. The time and place of each of those acts or omissions is specified in the warrant. I conclude that adequate particulars have been provided in the warrant of the criminal activity alleged.
22. Third, Patel relies upon the further statement provided by the prosecutor's office that sets out some of the evidence on which the prosecutor will rely at trial. In effect, Patel argues that in his case there may have been a mistaken identification. It does not seem to me that this is a subject for consideration upon analysis of the question whether adequate particulars have been given under section 2. As much is acknowledged by Mr Hawkes in his skeleton argument. Nonetheless, we are invited to have regard to the correspondence when considering the issue of proportionality and section 21 of the Act, to which I will return in a moment.
23. Fourth, the appellant Desai argues that the particulars provided do not sufficiently identify the sentence that will apply to the charges laid. This, it is submitted by Mr Cooper, is symptomatic of the case which does not adequately particularise the offending. I disagree. The warrant states the provisions of paragraph 370 of the German General Fiscal Law. The standard form of the offence is punishable with up to 5 years' imprisonment in each case but where the case is particularly serious the penalty may be between 6 months' and 10 years' imprisonment. If the appellant committed the offence as a member of a group formed for the purpose of repeatedly committing tax offences, the offence would generally be deemed particularly serious. Other circumstances in which the offence will be so deemed are stated in the warrant. In my view, that statement of the law is clear.
24. I turn, therefore, to the human rights argument raised in Patel's case. The judge was required by section 21(1) to decide whether the appellant's extradition would be compatible with his Convention rights within the meanings of the Human Rights Act 1998. That involved consideration as to whether the interference with the appellant's private and family life by extradition would be disproportionate to the legitimate objective contemplated by Article 8(2).
25. Mubarak Patel is a successful businessman who gave evidence before the District Judge that his 52 employees depended upon his personal management and supervision. Without him the business would be likely to collapse. He is married with three children aged 13, 11, and 7. Having recently lost their grandparents, the children were particularly dependent on the appellant. The District Judge did not accept that the business would collapse in Mr Patel's absence. There had been a recent investment of £200,000 and there was £80,000 available for distribution between the two major shareholders: Mr Patel and his brother.
26. The judge recognised the full force of the argument that separation from family and business would have a devastating impact upon the appellant and his family. The judge took account of the real risk that the appellant would be remanded in custody in Germany awaiting trial. Despite the impact upon the appellant's private and family life the judge concluded that the public interest in extradition to face allegations of serious crime outweighed the personal rights of the appellant to enjoy his private and family life in the United Kingdom. In other words, extradition was a proportionate pursuit of the legitimate objective under Article 8(2). In my judgment, the District Judge's analysis cannot sensibly be criticised.
27. However, it is now contended on behalf of Patel that his extradition is no longer proportionate because there are doubts as to the strength of the evidence on which the prosecutor will rely to support his allegation of guilt. In a letter of 25 July 2014, the prosecutor disclosed that five further suspects have been arrested. The prosecutor will rely on a series of Skype conversations between the alleged conspirators. Patel's complicity is to be established by the identification of his IP address, namely the Data Sanctuary Limited, of which he is the Managing Director. It is contended that this was the conspirators' "back office". However, it is submitted on Mr Patel's behalf that in interviews by alleged co-conspirators uncertainty was expressed as to the identity of the man "David" or "Professor." It will be Patel's evidence that although he was the owner of Data Sanctuary Limited, he had rented an office at its premises to a man called Makbul Patel. A co-accused, Dola, described to the German police the office that he had visited at Data Sanctuary Limited's premises in Blackburn. His description, it will be argued, matches the location of the office leased by the appellant to Makbul Patel. Information provided by the appellant's German lawyer suggests that the prosecutor is reviewing the evidence in the case of the appellant Patel.
28. It is submitted in the alternative, as I understand it, that these are matters that the court can properly take into account for the purpose of making a decision whether the appellant's Convention rights would be contravened were he to be extradited to Germany.
29. In the alternative, we are invited to adjourn Mr Patel's Article 8 argument to await the result of the prosecutor's review of the evidence concerning the appellant Patel.
30. In my judgment, none of this material changes the proportionality of the extradition decision. It is not the business of the requested state or the court considering a Part 1 extradition request to look into the merits of the evidence against the appellant unless it is contended that the process of the court is being abused. To do so would be to circumvent and undermine the very purpose of Part 1 of the Extradition Act 2003. In my judgment, the material disclosed to the court comes nowhere near the required standard. It is commonplace that, if invited, a Prosecutor will review the state of the evidence. That, however, is far from evidence that the extradition of the appellant is no longer sought or will in a short period of time no longer be sought.
31. I would refuse an adjournment of the Article 8 issue because I do not consider that the strength of the Article 8 argument would materially change if an adjournment was granted. I would resolve each of the issues raised in favour of the respondent. These warrants have been outstanding since February 2013. We have been invited to consider the postponement of the operation of the warrants on what I understand to be humanitarian grounds. Having examined the material upon which we are invited to postpone the operation of the warrants, I would dismiss the appeals and decline to postpone the effect of our decision.
32. MRS JUSTICE COX: I agree and would also dismiss these appeals.