Case Studies

Largest confiscation order following a private prosecution in the UK

Ketan Somaia was described as an “Olympian scale” fraudster by an Old Bailey judge when he was sentenced to 8 years in prison for swindling entrepreneur Murli Mirchandani out of over £12.25 million. But despite the severity of Somaia’s crimes, and the amount of money involved in his fraudulent activities, this case may never have made it to court, let alone reached a successful conclusion.

The following case study outlines how Mr Mirchandani was able to seek justice through the courts and recoup his lost money by instigating the biggest private prosecution ever to be carried out in the UK.

The story of the scam

From the outside, Ketan Somaia appeared to be a perfectly respectable businessman. He had made his money in the 1990s and 2000s in banking in Africa and Dubai, and by some accounts owned assets worth nearly £300 million. He lived a luxury lifestyle, had an office in Mayfair, and claimed to have business ties with India’s billionaire Hinduja brothers. He even had high-level political connections in the UK, and his companies had been chaired by a former UK government minister. 

So, when the two first met, Murli Mirchandani, himself a successful self-made entrepreneur, saw no reason to doubt Somaia’s credentials. “I trusted him implicitly,” Mr Mirchandani later said. “He seemed to me to be a very successful and wealthy businessman and I thought that I could benefit from doing business with him.”

It was that during the period of June 1999 to August 2000, Mr Mirchandani lent Somaia over US$19 million (around £12.25 million) in short term loans at high interest rates. Mr Mirchandani believed his money was being invested in attractive business projects – shares in banks in Mauritius and Tanzania, diamond mines in Liberia, a hotel chain in South Africa – all with the promise of guaranteed profits and a swift repayment of the original loan.

But whilst Mirchandani did receive the interest payments on some of the initial loans, he never received any repayments of the original capital, and never once saw official paperwork for how his money had been invested. It eventually became apparent to Mr Mirchandani that he had been conned and that if he ever wanted to see his money again, he would have to resort to legal proceedings.

Unfortunately, he was told that state bodies didn’t have the capacity to pursue the matter. So, Mr Mirchandani decided that his only recourse was to instigate a private prosecution, resulting in the largest confiscation order ever to be made in a private prosecution.

Taking on the case

Many people are unaware of their right to privately prosecute, and even those who know the option exists need to be fully informed and given expert guidance throughout the process. 

Tamlyn Edmonds, a co-founder and Managing Partner at EMM, took the lead on the case, assisted by Ashley Fairbrother. Tamlyn is a seasoned prosecutor who is well regarded for her expertise in fraud-related private prosecutions. Her wealth of expertise in serious fraud, asset recovery, and corruption was a perfect fit for an unprecedented confiscation case following a private prosecution such as this. 

Gathering evidence

But even with such expertise at the helm, conducting a large scale financial investigation of this type without any assistance from state bodies is always a challenge. So, when it came to gathering evidence, we called on the expertise of forensic accounts HSNO and investigators at BGP Global Services.

During the trial and confiscation proceedings, Mr Somaia claimed that he had no money. But Gavin Pearson, financial investigator on the case, was not convinced. “It quickly became clear that the Defendant’s business affairs had been operated in a manner designed to hide income and assets from public view,” he said. “When combined with an extremely extravagant lifestyle, this led me to conclude that the Defendant had hidden assets.”

Indeed, we were able to demonstrate that Somaia owned two properties worth over £1 million, had spent £100k on his daughter’s wedding, and had made a £40k loan to a family friend. We also found he was spending extravagant sums of money on luxury holidays, expensive restaurants and high-class hotels, even whilst the trial was ongoing.  

Our investigations also revealed that Somaia had been doing business in the UK since the late 1990s and had been an official resident here since 2009. And yet there was no record of him having ever paid tax in this country – or anywhere else for that matter.

The verdict

Thanks to Tamlyn’s expert leadership, and the scrupulous work of our investigating partners, we were able to deliver a groundbreaking confiscation result following a private prosecution resulting in a record confiscation order. In total, Ketan Somaia was ordered to pay £20 million in a confiscation order which formed the benefit of his crime, as well as £18 million compensation to Mr Mirchandani.

Ketan Somaia was convicted in June 2014 and was sentenced to 8 years at the maximum security prison, HMP Belmarsh.  

A landmark case

This case represents the biggest private prosecution in British legal history, and the first time a private individual has carried out confiscation proceedings without the help of the police asset recovery team.

The right to bring a private prosecution is vital to safeguarding individuals’ constitutional rights. In a time when state resources are under increasing pressure, the private prosecution services offered by law firms like EMM are not only a viable alternative for private individuals, but they can also be a quicker and more successful one.

Crypto Fraud Case Study

Successful Collaboration Recovers Life Savings for Victim of Crypto Fraud

The following case study outlines how an elderly victim was able to recoup his lost assets in a crypto fraud…

In a groundbreaking case, a unique collaboration between police, legal experts, and cryptocurrency exchanges enabled the recovery of life savings stolen from a vulnerable elderly victim. Demonstrating the power of strategic partnerships, this case highlights the transformative potential of innovative legal and investigative approaches in tackling the complex issue of crypto-asset scams. Through a combination of tenacity and teamwork, those involved achieved what most victims of such sophisticated fraud can only hope for; the return of their stolen assets!

Sixty Years of Life Savings Stolen

In 2021, a retired, older man (Mr X), began considering investing in cryptocurrency. He undertook some research and opened accounts with well-known exchanges Binance and Kraken and began to invest in Bitcoin. Following a search for details on how to transfer cryptocurrency between the exchanges, Mr X began receiving telephone calls from a person (Rolf) who purported to be employed by Blockchain.com, to assist cryptocurrency investors to transfer their assets between the exchanges.

A typical Scenario in Crypto Scams

Rolf managed to convince Mr X to set up a temporary Coinbase.com account within which to make deposits. He bombarded Mr X with telephone and video calls assuring Mr X of the security of the transactions and forcefully persuaded Mr X to transfer funds from his current accounts through a Coinbase account. Mr X, was at the time, caring for his wife, who was suffering with dementia, who then died. Sadly, the fraudsters even had the temerity to call him on the day of the funeral to persuade him to invest more into the false investment platform. 

Mr X was in a state of grief following the death of his wife of almost 50 years. He was at his most vulnerable and was led to believe he was transferring cryptocurrency to an account he controlled. In November 2021 Rolf convinced Mr X to change his phone number, stating that it was a more secure means of contacting him; rather it was a further method of manipulation.

Concerned Rolf was not as genuine as he had initially thought, in December 2021 Mr X decided that he no longer wanted to invest further funds and wanted to withdraw the funds in his Binance account. Rolf told Mr X he would hear from a Transactor at Blockchain.com to assist with the withdrawal. He then began receiving calls from three other individuals, all purporting to be working for blockchain or Binance.com and pressuring Mr X to make further investments or to pay substantial fees/taxes to withdraw his funds.

Several tactics were used by these individuals to persuade Mr X that his investments were genuine and protected and that the tax payments were required. In total, he invested over £300k: this amounted to his life savings, saved up over 60 years’ hard work in agriculture.

Police Take the Lead

The matter was reported to his regional Police force in April 2022. An investigation by the Police concluded that the funds were not in the control of Mr X, this was indeed a crypto fraud, and his assets had been stolen from him

Using Chainalysis, the Police were able to trace 5.8 BTC of Mr X’s stolen funds through two unknown wallets into a wallet address at Binance. The account was then frozen. Disclosure was obtained from Binance which demonstrated that the account belonged to an Israeli national.

The Police contacted the account owner, to request the return of the funds. Sadly, there was no cooperation from the individual, and although recovery attempts were made pursuant to Part 5 of the Proceeds of Crime Act 2002 (POCA), they were unable to seize the assets using police powers.

Turning to a Private Prosecution

While the Police investigation revealed assets to recover, the fraudster had obfuscated the trail of funds through different wallets using DNS domains.

Given the difficulties in recovery, and the historic record of success in collaboration between public and private sector, Mr X was therefore passed to Edmonds Marshall McMahon (EMM) to pursue recovery of his assets.

EMM have experience tracing and freezing crypto wallets and have secured orders in other cases against suspected fraudsters over large amounts of frozen crypto.

Thanks to our expertise in crypto scams and the scrupulous work of our investigation and legal teams, we were able to bypass the costly step of obtaining Freezing Orders, which saved significant legal expenses.  

In very short order, EMM were able to trace and substantiate a valid claim to the assets and recover them, despite what are now typical assertions from the alleged fraudster that he was a bona fide trader.

Recovery of the crypto assets

To achieve the recover of the assets, EMM worked with Binance to obtain the necessary release documentation. We understand that in the meantime the Spanish and German authorities also had claims on some of the funds frozen but were unable to mobilise as effectively as the joint public/private sector partnership which occurred in this jurisdiction.

EMM recovered the cryptocurrency, converted, and returned it to Mr X.

Setting a Precedent for Future Cases

Many people are not aware of their right to privately prosecute, and those who do know the option exists, need to be fully informed and helped, with expert guidance throughout the process.  This crypto fraud case represents the enormous potential for cooperative efforts among law enforcement, legal professionals, and the cryptocurrency industry, in our shared drive to recover stolen crypto assets. Such successful collaborations are often rare. However, with experience, tenacity and innovation, we’re confident that this model could serve countless other crypto-fraud victims in similar predicaments.

This case was led by Partner Ashley Fairbrother and Senior Associate Fani Gamon of Edmonds Marshall McMahon.

Charity Fraud Case Study

Successful private prosecution following “organised, sophisticated, and targeted’ fraud on cancer charity

R (Macmillan Cancer Support) -v-  Edna Da Silva Vieira (2024), Southwark Crown Court

The Fraud:

On 29 October 2024, Edna Da Silva Vieira was sentenced before the Southwark Crown Court following an ‘organised, sophisticated, and targeted’ fraud, in which hundreds of bank accounts were used to defraud Macmillan’s cancer grant system 1.

Ms Da Silva Vieira was the fifth defendant to be sentenced in relation to this fraud, with her four co-defendants being sentenced in May 2024.

Over a 15-month period during the COVID-19 pandemic, a group of five defendants used hundreds of aliases, telephone numbers, addresses as well as corporate and individual bank accounts to launder the proceeds of the fraud. The fraud involved hundreds of telephone calls purportedly by genuine applicants pretending to have various forms of terminal cancer, including prostate, throat, breast, ovarian, skin and thyroid cancer. These were all lies.

The Facts of the case:

Macmillan is a cancer charity which provides specialist health care, physical, financial, and emotional support to people affected by cancer.

In late-2022, Macmillan identified suspicious grants which suggested organised fraudsters were seeking to take advantage of new systems developed as a result of the Covid pandemic. Edmonds Marshall McMahon (“EMM”) were instructed in August 2022 and, with Macmillan’s Counter Fraud Team, undertook a complex and wide-ranging investigation.

The Sentence

Within three months, five connected individuals, identified as being responsible for the fraud, were charged, and hundreds of their bank accounts were restrained.

All five defendants were charged with conspiracy to defraud Macmillan. Shortly before trial, they each plead guilty to money laundering charges under the Proceeds of Crime Act 2002 (PoCA).

The Judge remarked that:

“This was a sophisticated fraud on a charity which seeks to assist those who suffer from cancer. The defendant’s conduct is a disgrace, not least for someone who was formerly a trustee of a charity herself”.

Ms Da Silva Viera was sentenced to 17-months imprisonment, suspended for 18 months, and 100 hours of unpaid work.

The Judge formally commended the Macmillan investigator, Emily Hartley, who discovered and investigated the fraud, without which, this fraud may never have been identified.

Recovering the proceeds:

Macmillan also successfully recovered almost 100% of the stolen proceeds which will be used to provide the services and support to those who are affected by cancer, and to continue in its aim to ensure that no one faces cancer alone.

Comment

Bob Browell, Counter Fraud Manager at Macmillan Cancer Support comments:

“Frauds perpetrated against charities like Macmillan strike at the very essence of societal trust and altruism. The emotional toll of fraudulent activities reverberates long after the crime is uncovered, tarnishing the reputation of charities and eroding public confidence in charitable causes.”

I would like to credit the brilliant work of the team at Macmillan. The case represents the most complex and extensive investigation undertaken since the inception of Macmillan Cancer Support’s Counter Fraud Team.

Whilst balancing our ambition to quickly get money out to those who were suffering from cancer during a global pandemic, the team were able to notice anomalies in applications, which were immediately investigated further and with legal guidance, the perpetrators were quickly identified.

I am glad that today the individuals involved have been brought to justice.

As a result of this egregious breach of trust, Macmillan was forced to temporarily pause the payment of grants to all applicants. This meant that genuine applicants who were suffering from the devastating effects of cancer were unable to receive the assistance they deserved. In addition to this, the money that was stolen could have paid for hours of support by Macmillan nurses helping people’s spouses, mothers, fathers, sons, daughters, and wider family who are suffering with cancer. They are the real victims. I am glad that our robust processes and systems have done their job, the stolen funds have been recovered and we can continue to support those that most need it.

We will not tolerate fraud and we will take action wherever we see it.”

Ashley Fairbrother, Partner at Edmonds Marshall McMahon, comments:

“These defendants were convicted of laundering money that was stolen from a well-respected and deserving charity. The defendants exploited a system designed to provide crucial financial assistance to individuals battling cancer. They committed a heartless crime that diverted essential resources away from those who needed them most.

The message must go out to people who believe that charities are an easy target – they are not; these offences are serious, and the consequences are serious. Many people give their time and money to raise money for good causes, often because either they or some of their own families have experienced cancer.  The effort needed to raise that money is great, and the theft of the fruits of that effort is particularly egregious.

Private prosecutions are increasingly becoming the main vehicle of redress for charities, especially at a time when the Government is looking at new ways to combat fraud. That is why we feel it’s important to highlight the vital role private prosecutions play in the criminal justice system. We hope that this sends a clear message on behalf of charities to those that commit crimes against them, that they will not get away with it.”

The case was prosecuted by Ashley Fairbrother and Andrew Marshall, Partners, and Oliver Fredrickson, Associate, at EMM, and Dominic Hockley at Harcourt Buildings.

8th November 2024

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1. Sentencing Remarks of HHJ Hopmeier on 29 October 2024. ↩︎