In a DTI case Kevin Sykes was sentenced today at Blackfriars Crown Court to four years' imprisonment relating to his fraudulent trading as a "creditor resistance strategist" operating under the business name of White Knight. This judicial outcome now enables the publication of an earlier prosecution of Sykes - and others - by the SFO in relation to the theft of the pension fund of CW Cheney & Son Ltd; a case that resulted in five convictions amounting to combined prison terms of twenty-six years. The outcome of the SFO case had hitherto been the subject of a court order prohibiting publication pending the completion of the DTI case.
The SFO prosecution in 2004
The case involved seven defendants; Simon Maya, Trevor Farrell, Altaf Sayed, Ian Selby, Cassius Powell, Kevin Sykes and Adrienne Morris. They were all charged between March and May 2002 with conspiracy to steal contrary to section 1(1) of the Criminal Law Act 1977. In particular, that during 2000 they conspired together and with others unknown to steal credit to the value of £2,918,915 belonging to the CW Cheney & Son Ltd Pension Fund in the account of Britannic Investment Managers Ltd. The case was transferred to Birmingham Crown Court.
First phase of SFO proceedings
Four of the defendants stood trial between 16 January and 6 May 2004 of whom three were convicted and one acquitted. One other defendant pleaded ahead of trial. Sentencing was on 17 May 2004 as follows:
- Simon Michael Maya (d.o.b. 22 Nov 41) was found guilty and sentenced to seven years' imprisonment.
- Trevor Hamilton Farrell (5 Sep 65) pleaded guilty and was sentenced to three years' imprisonment.
- Altaf Sayed (22 Oct 67) was found guilty and sentenced to three and a half years' imprisonment.
- Ian David Selby (9 Oct 47) was found guilty and sentenced to four and a half years' imprisonment.
- The defendant acquitted was Cassius Augustus Powell (9 Apr 66).
Second phase of SFO proceedings
Two other defendants were to be tried in a second trial later in 2004 but one, Kevin Sykes (29 Jul 60), opted to plead. He was a principal participant in the fraud.
The remaining defendant, Adrienne Gay Morris (20 Apr 47), played a lesser role and the SFO decided not to proceed with a trial of her alone.
Kevin Sykes was sentenced on 7 October 2004 to six and a half years' imprisonment. He was disqualified from acting as a company director for ten years. Additionally a suspended prison sentence of eighteen months handed down in an earlier prosecution of Sykes at Southwark Crown Court in October 1998 by the DTI was activated. This was for offences under the Theft Act and for acting as a director whilst a bankrupt. Thus the full custodial sentence for Sykes amounted to eight years.
Sentence today in the DTI action is to run concurrent to his existing sentences.
Background
CW Cheney & Son Ltd was a small manufacturing firm in Hockley, Birmingham. It made locks, such as those used on luggage. The Cheney pension scheme was established in 1973 as a final salary scheme for employees. In 1999 the fund represented around £3.1 million. In April 2000 the company and its pension fund was acquired by Cumberland Leasing Corporation, a company controlled by Kevin Sykes, Michael Maya and others. CW Cheney& Son had ceased to be a going concern by this time and its largest single asset was the pension fund. It was Sykes and Maya's intention, with others, to raid the fund.
At the acquisition by Cumberland Leasing, the original trustees of the Cheney pension scheme resigned and Ms Adrienne Morris of The Practice (an insolvency firm controlled by Sykes) was appointed nominee director. She and a law firm - Morgan Matisse Solicitors - which was based at the same address as The Practice and acting for Sykes, became the new trustees. At this time £700,000 was extracted from the fund.
Sykes and Maya created the false impression that much of the day-to-day running of the fund was being undertaken by Morgan Matisse. This was to put the authorities and other key professionals off the scent of what was actually happening. In May 2000 Morgan Matisse Solicitors were replaced as trustees by Ryan Morris (son of Adrienne Morris) and Sykes was appointed power of attorney for Ryan Morris. Just prior to this change, a further £50,000 was extracted from the fund and paid to The Practice.
In September 2000 Sykes arranged with Ian Selby to sell Cheney to Selby's company Highland Regal Distillers Ltd. Both Adrienne and Ryan Morris resigned at this time as trustees of the fund. Selby aided Sykes to remove almost £2.2 million from the fund. Cassius Powell was a director of Cheney and of Highland Regal Distillers. He was found not guilty of being involved in the removal of this money from the fund.
A large part of the £2.2 million was used to pay off creditors of a company called Bricmore Investments which was owned by Trevor Farrell and Altaf Sayed both of whom were conspirators in the theft.
In October 2000, following information from the fund actuaries, the Occupational Pension Regulatory Authority ("OPRA") intervened and appointed an independent trustee. By December 2000 the case had been referred to the Serious Fraud Office and an investigation was opened in conjunction with the West Midlands Police.
The sentencing of Sykes in October last year brought to an end a long SFO investigation into the plundering of the £3 million pension fund of CW Cheney and the successful prosecution of five of the defendants. The combined prison sentences in the SFO action amounted to 26 years.
SFO Assistant Director Philip Blakebrough who was the senior case lawyer said, "This was a callous and ruthlessly executed fraud designed from the start to steal the Cheney pension fund by setting up a system of puppet trustees who instead of protecting the fund helped to plunder it. Together with the West Midlands Police Economic Crime Unit we conducted a painstaking investigation that unravelled the mechanism of the fraud and produced compelling evidence at court which brought about an appropriate and satisfying judicial conclusion, the story of which can now be told".
Serious Fraud Office
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London WC1X 0BJ
Press Office tel: 020 7239 7001/7000 or mobile: 0781 807
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Main switchboard tel: 020 7239 7272
press.office@sfo.gov.uk
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