On 20 February 2023, His Honour Judge Baumgartner delivered sentence against three individuals, Frederic Marino, Aurelien Bessot and Yoshiki Ohmura, for conspiring to commit fraud by abuse of position contrary to s.1(1) of the Criminal Law Act 1977 and ss. 1 and 4 of the Fraud Act 2006. Marino and Ohmura were convicted at Southwark Crown Court on 8 December 2022 following unanimous verdicts of guilty. Bessot had pleaded guilty on 5 November 2020. The prosecution was brought by the Crown Prosecution Service (“CPS”).
Marino had failed to attend part of his trial and then sentence, having absconded. His Honour Judge Baumgartner described him as a greedy, corrupt, and manipulative man, who thought very little if nothing of how his offending might affect others, including Bessot and Ohmura. Likewise, Ohmura also failed to attend sentence. Both were sentenced in absentia.
Facts of the fraud
The fraud was relatively sophisticated, involving the creation of numerous corporate entities around the world. Essentially the defendants were involved in syphoning off money ultimately owed to two companies, Libya Africa Investment Portfolio (“LAP”) and FM Capital Partners Limited (“FMCP”), diverting them to offshore entities controlled by themselves.
LAP was the Libyan sovereign wealth fund. Bessot and Marino were entrusted to invest hundreds and hundreds of millions of US dollars belonging to LAP through FMCP (a company incorporated in England and Wales and of which Bessot and Marino were both were directors). Bessot secretly arranged for a proportion of the funds under investment to be paid to himself and Marino, via an offshore company. They were assisted by Ohmura, who initially worked at Bank Julius Baer, through which the investments were made. Ohmura subsequently set up his own company to act as an intermediary through which secret profits were paid to Marino and Bessot’s offshore company after deducting his own cut to facilitate the transaction.
In addition to earning fees for FMCP, fees were also paid to an offshore company controlled by Bessot. The offshore company was supposedly acting as the “introducer”, “arranger” or “distributor” of the financial products engineered by the banks that were offering them. The first deal resulted in Bessot and Marino receiving $3.125 million, from which Bessot received $300,000. Ohmura received $625,000 through his company Conquest Capital Ltd (a Caymanian company) in return for his part in bringing about this $3.125 million payment.
A payment of fees was also paid to Ohmura’s Swiss company called Conquest Financial Partners AG (“CFP”). CFP then paid most of the money on to a company set up in the Seychelles called Ironfly International Ltd (“Ironfly”). Ironfly was jointly owned by Bessot and Marino and was set up by Bessot for that purpose, at Marino’s instigation. Bessot also set up two other offshore companies, one for himself called Regent 121 Ltd and one for Marino called Leopard Technology Ltd; all three companies had bank accounts in Monaco. After payments were made to Ironfly, they would be divided up between Bessot and Marino to Leopard and Regent 121. The use of these offshore companies by Bessot and Marino was designed to hide the fact that they were receiving payments for investments managed by FMCP. They had to be hidden because the defendants were not entitled to receive fees: any fees should have been paid to FMCP, a company in which LAP had a 55% share.
The total sum defrauded relating to four Bank Julius Baer transactions and for which Marino and Ohmura were sentenced was $8,458,400. The total sum for the entire 12 transactions relating to the offending conduct, to which Bessot accepted he was party was $7,883,400 plus €1,362,500. The total payments to Bessot’s company Regent 121 were $1.42 million and €801,000.
As such the value of the fraud was not insignificant.
Ultimately, Marino was sentenced to 7 years and 6 months in prison and Ohmura received 3 years and 6 months. Their sentences will not begin to run until they are remanded in custody, extradition processes being required to return them to the jurisdiction. Bessot was sentenced to 15 months in prison, suspended for a period of two years, given exceptional mitigating factors including entering into an agreement with the Prosecution to give King’s Evidence, pursuant to s.73 of the Serious Organised Crime and Police Act 2005.
Confiscation
Both Marino and Ohmura were considered absconders within the meaning of s.27 of the Proceeds of Crime Act 2002 (“POCA”).
S.27 applies if (a) a defendant absconds, and either before or after doing so, they are convicted before the Crown Court, or (b) they abscond after being committed to the Crown Court for sentence, or (c) they abscond after being committed to the Crown Court in respect of an indictable offence under s.17 of POCA (committal after conviction by a magistrates court with a view to a confiscation order being considered) (see s.27(2)). In this case paragraph (2)(a) applied.
The Prosecution made an application is to proceed to confiscation under s.27, and His Honour Judge Baumgartner found it appropriate to do so. He made directions for the provision of a s.16 POCA statement.
In relation to Bessot however, the prosecution sought to postpone confiscation proceedings under s.14 of POCA. Bessot, you will recall, pleaded guilty on 5 November 2020. As such, this is his date of conviction. S.14 of POCA deals with postponement and provides that confiscation proceedings may be postponed for a specified period which may be extended. Ordinarily, the period of postponement should be no later than two years after conviction (s.14(5)). This date, for Bessot, was the date he pleaded guilty, not the date of his sentence. This was a crucial date missed by the CPS.
Under s.14(4) of POCA, the specified period may be extended to a new date but only if there are exceptional circumstances. However, His Honour Judge Baumgartner held there were no exceptional circumstance to postpone the proceedings and refused their application. This likely means that the CPS had failed between November 2020 to the date of the sentence, to make such an application.
There are several reasons why the confiscation proceedings may be postponed. Commonly, additional time is often required to complete the requisite stages of confiscation (i.e. filing s.16 prosecution statement) or because the court is unable to accommodate a confiscation hearing within the specified period (see for example, R v Johal [2013] EWCA Crim 647).
The significance of this lapse in time in this case means that no compensation order could be sought out of a confiscation order against Bessot to repay the victims of the fraud. As stated above, Bessot was sentenced on the basis that he knew and participated in the taking of secret commission amount to $7,883,400 and €1,362,500. His company Regent 121 received payments of $1.42 million and €801,000. This would, one would think, have been a starting point for calculation of benefit from particular conduct and, loss to the victim companies, FMCP and LAP.
The case is a stark reminder to go back to basics and consider the necessary time limits for proceeding to confiscation. If they are missed, the benefits of confiscation proceedings can be lost.
Mai Holdom
