Six persons have been sentenced at Sheffield Crown Court to a total of almost 16 years imprisonment for a fraud relating to mortgage applications.
This followed a trial of three of the defendants which concluded with jury verdicts of guilty on 2 November. The other three defendants had already admitted their parts in the fraud ahead of trial. Sentencing was on 3 November.
Outline
This is a case about a systemic abuse of the mortgage lending procedure in relation to five properties in Yorkshire. At the centre of the fraud was a solicitors' practice, TI Clough of Bradford, which undertook the conveyancing work on the five properties concerned. The properties are (1) Reinwood House in Huddersfield; (2) Garden Cottage in Barnsley; (3) Aspen House in Aberford; (4) 4-6 St John's North in Wakefield; (5) 11 Fieldhead Drive in Leeds.
The six defendants in this case, are:
Noel Bartholomew Wardwas a mortgage broker who traded as Eireann Associates. It was he who put together the applications on all five properties.
He was found guilty of five counts of obtaining a money transfer by deception and was sentenced to 6 years' imprisonment.
Raymond Brown was a conveyancing clerk with the TI Clough practice and it was he who played a major role in processing the mortgage documentation.
He was found guilty of five counts of obtaining a money transfer by deception and was sentenced to 3 years' imprisonment and ordered to pay £40,000 defence costs.
(Also at TI Clough was John Fitzpatrick, a solicitor, who is believed to have fled the jurisdiction and for whom there is an outstanding arrest warrant).
Ian Ronald Colphon was a mortgage applicant and a client of both Ward and TI Clough.
He was found guilty of one count (property 2 above) of obtaining a money transfer by deception and is sentenced to 18 months' imprisonment in absentia. He had failed to attend court on 25 October. A warrant has been issued for his arrest.
Tracey Ryderwas a mortgage applicant and a client of both Ward and TI Clough.
She pleaded guilty at trial opening to one count (property 1 above) of obtaining a money transfer by deception and was sentenced to 2 years' imprisonment, suspended for 2 years.
Howard Claytonis a chartered accountant who provided false financial references for mortgage applicants.
He pleaded guilty in February, seven months ahead of trial, to five counts of obtaining a money transfer by deception. He was sentenced to 1 year imprisonment and ordered to pay a maximum of £50,000 defence costs.
Andrew John Young was a solicitor with Winstons of Manchester whose client account was used to channel funds from TI Clough.
He pleaded guilty shortly before trial to two counts of assisting another to retain the benefit of criminal conduct. (One count related to assisting John Fitzpatrick. The other count related to assisting Noel Ward). He is sentenced to 2 years and 3 months' imprisonment. (This sentence is to run consecutively to a sentence arising from a separate prosecution by the Crown Prosecution Service for theft. He was sentenced for that offence on 17 May 2004 to 21 months' imprisonment).
The fraud
The essence of the frauds, which were committed at various dates in 2000, is that applications for mortgage advances were made for properties where the property price quoted in the application was higher than the actual price. False documents, forged documents and other misleading information supported the applications. Money acquired through these fraudulent applications was then laundered through the client account of a solicitor's firm.
With regard to Reinwood House, Ward, Brown, Clayton and Ryder dishonestly obtained £312,000 for Ryder by a falsified application for a mortgage advance. The lender, the Yorkshire Bank, was provided with false information about the applicant's (Ryder's) employment, financial and tax status. Clayton, an accountant, assisted with the provision of false information
With regard to Garden Cottage, Ward, Brown, Clayton and Colphon dishonestly obtained £54,125 from the Royal Bank of Scotland by preparing a mortgage application in the name of Colphon, but the details were completely bogus and included provision of a forged driving licence, false bank statements and other false information about the applicant, againinvolving support from Clayton.
With regard to Aspen House, Ward, Brown and Clayton dishonestly obtained £370,000 mortgage advance from the Yorkshire Bank in the name of a Lisa Walsh. As with the above two applications the lender was misled by false claims and by false or forged documents submitted in support of the application.
With regard to 4-6 St John's North, Ward, Brown and Clayton dishonestly obtained £320,000 mortgage advance from the Yorkshire Bank in the name of a Felicity June Lapish. The applicant was a real person who lived in Hing Kong and who was entirely unaware of this application. Lies were given about her profession, assets held and financial status and forged documents were furnished to deceive the lender.
With regard to 11 Fieldhead Drive, Ward, Brown and Clayton dishonestly obtained £164,975 mortgage advance from the Woolwich Building Society in Ward's own name. The lender was told that Ward was to sell his existing property to help finance the purchase of the new property. This was false. Certain financial documents submitted to support the application were false.
John Fitzpatrick, a solicitor is alleged to also have also benefited from the frauds relating to the properties in 1 to 4 above.
The illicit proceeds of certain of these frauds were laundered at various dates between August 200 and June 2001 through the solicitors business in Didsbury, Manchester of Andrew Young who suspected that the proceeds resulted from criminal activity.
Proceedings
The Serious Fraud Office and the West Yorkshire Police Economic Crime Unit commenced a joint investigation in January 2001. The defendants were charged in July 2003. Three defendants pleaded before trial which opened on 20 September 2004. The jury returned verdicts on the remaining three defendants on 2 November and all six were sentenced the following day.
SFO case controller Andrew Sackey said " This outcome demonstrates the effectiveness of combining the skills and experience of SFO investigators and lawyers and West Yorkshire police officers in bringing fraudsters to account. It's a satisfactory result for the criminal justice system".
Sentencing remarks
Passing sentence, HHJ Keen QC described Ward as one of the two ringleaders who "used your position to breach the trust imposed in you by bankers" and "your expertise and knowledge of banking lay at the heart of this fraud".
Of Brown, the judge said "You were and remain still totally indifferent to the suffering caused to others involved. Your dishonesty, conceit and arrogance blinded you to the consequences of your actions and have blinded you to the suffering caused".
HHJ Keen said that Clayton had played a vital part in the fraud, but he was not a ringleader and "had the good sense to plead at the earliest opportunity" and that he "had demonstrated a real desire to repair the damage done by giving evidence for the Crown and it was important evidence".
Sentencing Young, the judge said "You abused the trust of the public and of your professional body. You used skilful, professional laundering techniques.
You allowed large sums of money to be paid into your client account, suspecting that it related to the proceeds of criminal activity. This is a classic way of laundering and you must have known that, yet you were prepared to deal with it and distribute it. This sentence is not just to punish you but also to deter others in your situation who may be tempted to act similarly."
