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Serious Fraud Office secures three convictions in $500 million trade finance fraud

2 February, 2023 | News Releases

Today at Southwark Crown Court, the Serious Fraud Office (SFO) secured convictions of two executives of British steel trading business, Balli Steel Plc., on six counts of fraud. Nasser Alaghband, CEO of Balli Steel, had pleaded guilty to one count of fraudulent trading, ahead of the 20-week trial.  

Balli Steel Plc bought and sold steel around the world using short-term loans from trade finance banks to fund its deals. The company collapsed in 2013, having amassed debts of around $500 million to over 20 creditor banks, triggering an investigation by the SFO.

SFO investigators exposed how two of the defendants, executives Melis Erda and Louise Worsell, conspired to deceive trade finance banks by providing misleading information, false shipping documents and forged signatures on fake sales contracts. This allowed Balli to obtain a string of loans to bolster the company’s finances and continue trading, while avoiding the repayment of many of these loans. By February 2013, this had led to a cumulative loss of approximately $150 million for five banks, including a debt of over $100 million owed to the Development Bank of Singapore (DBS).

The SFO also uncovered that many of the falsified documents were produced under the name of an in house shipping company, Trans Ocean Navigation (TON). It was concealed from Balli’s creditors that TON was not an independent shipper but controlled by Balli, was registered at an accommodation address in the Cayman Islands and was operated from Balli’s own London offices in Marylebone.

The investigation involved a record-breaking degree of international co-operation. Law enforcement partners in 36 separate countries including Belgium and The Netherlands provided evidence and information, more than any previous SFO investigation.

Lisa Osofsky, Director of the Serious Fraud Office, said: 

“Today’s result demonstrates our commitment to battling serious economic crime. I am proud of the whole SFO team for successfully exposing such a complex case of international fraud, and for bringing the company’s top executives to justice.

This group of individuals intentionally defrauded multiple international finance houses as they attempted to keep their fraudulent business afloat, using increasingly audacious methods as the scale of their debt spiralled.”

Update: The sentencing will take place on 3rd and 4th April 2023. 

Notes to editors:

  • The Serious Fraud Office fights complex financial crime to deliver justice and protect the UK’s reputation as a safe place to do business. We investigate and prosecute the most serious or complex cases of fraud, bribery and corruption.
  • The SFO team on this case was part of a Joint Investigative Team (JIT) with The Czech Republic’s National Organized Crime Agency of the Criminal Police and Investigation Service (NCOZ) and assisted in the investigation and prosecution of four defendants that jurisdiction in relation to credit insurance fraud involving Balli Steel Czech SRO’s (a subsidiary of Balli Steel PLC) forfaiting steel transactions.
  • As part of the UK investigation, the SFO collaborated with the US Federal Bureau of Investigation (FBI) and Department of Homeland Security (DHS) to gather evidence of the suspected offences, and also worked with the Belgian Federal Judicial Police and the Fiscal Information and Investigation Service (FIOD) in The Netherlands to secure key witness statements.
  • We also received evidence relating to Balli Steel trades from 24 other countries from around the globe.
  • Balli Steel Plc was the main trading entity within Balli Group Plc, of which it was a subsidiary. Both companies were ultimately controlled by the Alaghband family.

The charges of each individual are as follows:

  • Nasser Alaghband, former Director of Balli Group and CEO of Balli Steel, pleaded guilty to fraudulent trading prior to the trial.
  • Louise Worsell, Managing Director of Balli Steel Middle East FZE, was convicted on multiple counts of conspiracy to defraud.
  • Melis Erda, Balli Group Treasurer and Member of Balli Steel Executive Committee, was convicted on multiple counts of conspiracy to defraud.
  • David Spriddell, former Finance Director of Balli Steel, was found not guilty of fraudulent trading in carrying on the business of Balli Group Plc and Balli Steel Plc with the intent to defraud creditors.
  • Vahid Alaghband, former Director of Balli Group, faced charges of two counts of fraudulent trading and one count of conspiracy to defraud but was severed from this trial in November 2022.

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