Jersey Unreported Judgments

ROYAL COURT

(Samedi Division)

8 February 1999

Before: FC Hamon Esq., Deputy Bailiff, and

Jurats Gruchy, Potter, de Veulle, Le Brocq,

Bullen and Le Breton

AG

-v-

Raymond Eric Norman Bellows

Sentencing by the Superior Number of the Royal Court, to which the accused was remanded by the Inferior Number on 8 January 1999, following a guilty plea to:

Age: 65

Details of Offence:

The defendant was the founder and sole shareholder of a company which carried on the business of trust and company administration. Over a period of a little under four years he fraudulently converted a total of £5.1 million of clients' funds. Some of these were taken in order to repay amounts taken from other clients or were otherwise paid indirectly for the benefit of the clients. The count of obtaining by false pretences related to the obtaining of a bank loan of $US 500,000 on a false pretence when in fact the monies were needed and used for the repayment of a client from whom he had taken funds. The total net deficit was some £2.75 million. These monies had been used on speculative investments (most of them unsuccessful), repayment of monies to clients from whom he had taken money prior to the period covered by the indictment and on general living expenses.

Details of Mitigation:

Previous good character, extreme co-operation with police and plea of guilty avoided an expensive and complex trial; remorse; break-up of his marriage as a result of his arrest; the matter had been hanging over him for some two years after the initial complaint to the police whilst the matter was investigated; his age of 65. Weight was placed upon the fact, not disputed by the Crown, that the genesis of his difficulties was that he inherited clients in 1983/4 from a dishonest colleague who had abstracted some £400,000 from those clients. On discovering this the defendant had decided, in order not to damage his business, to cover the matter up by taking money from other clients to make good the shortfall rather than going to the police. He was then on a slippery slope from which there was no escape. The business ventures had been in order to try and make money so as to repay the amounts taken, not for personal gain.

Previous Convictions: None

Conclusions: 5½ years imprisonment on each count, concurrent

Sentence and Observations of the Court: Conclusions granted

The Court reiterated the importance of Jerseys reputation in financial matters. There were many mitigating factors but these were allowed for in the conclusions.

AG

Advocate B E Troy for the accused

JUDGMENT

THE DEPUTY BAILIFF: The indictment contains 26 counts of fraudulent conversion and one of obtaining property by false pretences. The gross amount stolen by the fraudulent conversion from the clients listed in the indictment, as the learned Attorney has explained to us, is some £5,101,189. Of this, the sum of £1,067,458 has been repaid at various times into the accounts from which the money had originally been taken, leaving a net deficit of £4,033,731. The repayments, we were told, were funded partly by Bellows, although we are not at all certain as to how much he paid in; partly by monies taken from other clients on the list, and partly from other sources such as the US$500,000 obtained from the Midland Bank. That came about early in 1997 when Bellows persuaded the Midland Bank to lend him that sum to part finance an investment by him in a book and CD ROM business covering the consultation process required to develop and build on the worlds swamp and wetland areas. Somehow he persuaded the bank that he had already invested some money in the venture himself and had to repay a temporary loan obtained for this purpose. Like everything else, sadly, that was a tissue of lies and the money went to repay money stolen from an investment company to avoid that theft from being discovered.

The indirect payments amount, in aggregate, to £1,588,833 so that the net amount taken by way of fraudulent conversation of the clients listed in the indictment amounts to £2,444,898. Adding that to the sum obtained by false pretences from the Midland Bank, the net amount of the defalcation amounts to £2,753,731. Whichever way we look at it, it was a considerable sum of money over a considerable period of time. Because it was over a period of time, complex and time-consuming investigations had to be carried out by forensic accountants.

A familiar pattern developed where often Peter was robbed in order to pay Paul; that is to say one investment company was used to pay off the running debts of another.

The money was used in part to repay other clients but it must be said that some was used for general living expenses and some for speculative and unsuccessful investments.

In the case of Barrick (1985) 7 Cr.App.R(S) 142 guidelines were set out for sentencing in cases where there was a breach of trust by employees and professional persons. In Whelan: Aspects of Sentencing in the Superior Courts of Jersey it says this re Barrick at p79:

The case of Barrick invites courts to look at the quality and degree of trust reposed in the offender; the period over which the offences took place; the use to which the proceeds have been put; the effect on the victim; the impact on public and public confidence; the effect on colleagues and partners; the effect on the offender; the offenders personal history; and matters of mitigation personal to the offender: co-operation, character and other personal circumstances by way of example.

The local cases cited to us, Delaney (13 May1993) Jersey Unreported; Stilwell (19 January 1998) Jersey Unreported; Hay (10 July1995) Jersey Unreported; Hanley (14 October 1993) Jersey Unreported, give a clear indication that it is undoubtedly of paramount importance that the reputation and integrity of the financial business on this Island should be preserved and its reputation remain untarnished as far as possible.

Having said that there are, as the learned Attorney has said and as Mr Troy on his clients behalf has repeated, many matters of mitigation. We have here a man of previous good character. He has been extremely co-operative with the police throughout the interviews and this has assisted the investigative process. He has pleaded guilty and thereby avoided an expensive and complex trial. He is remorseful. He has suffered damage to his family life as a result of what has occurred. The matter has been hanging over him for some time. However, as the Court has said on several occasions, it is inevitable that offences as complicated as those committed by the defendant will take time to investigate and this is a price which has to be paid by those who embark upon this type of offence. There is the additional factor of his age (65). This was also present in the case of Day (6 July 1997), referred to on page 78 of Whelans Aspects of Sentencing in the Superior Courts of Jersey, who was sentenced to a term of eight years imprisonment at the age of 65, It is clearly a relevant factor which goes to mitigation.

Clearly, there were some defalcations inherited from the late Peter Tregunna in approximately 1983/1984.

What Bellows said in his statement made at the time of the initial interview was this:

We have to remind ourselves of what the Probation Officer said in his excellent report to this Court and it is a question which we each might have asked ourselves:

Of course, in that context we have to recall that at the time and throughout Mr Bellows was earning in the region of £200,000 per annum and it might not have been too difficult to have set about making good the shortfall out of his own funds.

The Crown has asked for 5½ years imprisonment in this case. Mr Troy has said everything he possibly could say on his clients behalf and if we may say so has said it very well. However, even Mr Troy was only able to suggest a period of imprisonment of 5 years by way of an alternative.

Stand up, please, Bellows. We have given very careful thought to this matter and we sentence you to 5½ years imprisonment on each count, concurrent.

Authorities

Whelan: Aspects of Sentencing in the Superior Courts of Jersey: pp76-81

Ibid: Noter-up 1995-1996: pp24-25

AG -v-Delaney (13 May 1993) Jersey Unreported

AG -v- Stilwell (19 January 1998) Jersey Unreported

Barrick (1985) 7 Cr. App R (S) 142

AG -v- Hay (10 July 1995) Jersey Unreported

AG -v- Hanley (14 October 1993) Jersey Unreported