Nicholas Levene, a ‘city financier’ was sentenced to 13 years for 12 counts of fraud, one of false accounting and one of obtaining a money transfer by deception.
Levene took investors’ money under the pretense of investing the substantial funds in shares. However the money was spent financing a luxury lifestyle. The frauds were carried out between 2005 and 2009 and involved high net worth investors and high profile victims, including the owner of The Ivy restaurant. He used his strong reputation in the City to convince customers into investing their fortunes with him.
Levene, who was said to have a personal fortune in the region of £15-20m, was addicted to gambling, spread betting and lavish purchases. The amount attributed to his false accounting was in the region of £32m, but after taking into account the lost profits of his customers, the figure rose to over £100m.
Some of the money was given to other investors in order to placate them and to prolong the length of time he was able to continue his fraud.
We covered the sentence, the guidelines and the relevant considerations here.
Confiscation proceedings are intiated when a defendant is convicted of a ‘criminal lifestyle’ offence. These include fraud, money laundering and some drugs offences. The purpose is to deprive the defendant of the financial benefit of his or her crimes.
Confiscation is a terribly complicated area. There are many considerations. One such issue went before the Supreme Court last year in R v Waya.
It is necessary to determine the amount of benefit. Then, for the purposes of determining what can be confiscated, it is necessary to determine the recoverable amount – how much money is available to be confiscated? This may seem unduly fair to the defendant – if he has made £10m but squandered all but £50, why should the court only be able to recover £50? The principle is similar to that of the Asil Nadir compensation order – if the money isn’t available, what is the point in making an order for it?
The CPS Guidance on confiscation is available here.
At Southwark Crown Court on 25 March, HHJ Beddow made a nominal order of £1 against Mr Levene. Why?
This was reportedly to enable there to be an investigation into his assets, presumably to establish the precise sum that he has available.
The nominal figure will be able to be varied at a later date.
The Judge stated that if Levene made money in the future, he may be liable to pay back more.
Justine Davidge, representing the Serious Fraud Office, told the court yesterday (MON) that the bankruptcy order was still in place and that investigations into his assets were ongoing.
“All assets that have been released would go to the trustee of bankruptcy,” she said.
“Because of the circumstances, what the Serious Fraud Office propose is that there is an order in respect of the benefit to the sum of £32,352,027.
“In respect of the realisable amount, we suggest the court make a nominal order of £1 to be paid in seven days.”