STEELE:EX PARTNER AT PRINCESS DIANA’S SOLICITORS HELPED FLEECE SWISS BANK
A former partner at Princess Diana’s solicitors created bogus paperwork to help two conmen pull off a ‘spectacular’ £17.5m fraud on a Swiss bank, a court heard today (weds).
Ex-QPR director Kevin Steele, 51, an ex-director plotted with businessman Michael Shepherd, 50, and Mark Pattinson, 37, to trick EFG Private Bank into paying out a huge cash loan, jurors heard.
Steele allegedly abused his position as a partner at internationally renowned London firm Mischon de Reya, which famously represented the Princess of Wales in her divorce, in his dealings with Shepherd.
Prosecutors say Steele helped carry out the con using fake documents which stated Shepherd had access to £76.4m held in two accounts at the Guernsey branch of Swiss financial group Bank Julius Baer.
Steele then applied for a loan from EFG worth 22m Euros – more than £17.5m – claiming the £76m was available as a security, it is said.
The lawyer denies any dishonesty claiming he was acting in good faith and was duped by his client Shepherd.
David Aaronberg QC said: ‘[Michael Shepherd] is a man who both sides agree is a fraudster and a fraudster on rather a grand scale.
‘What Mr Shepherd did, assisted by another man called Mark Pattinson, was to pretend that he was a phenomenally successful business man enjoying huge personal wealth.
‘The reality was that he had enjoyed some success in business and you will hear it appears that he achieved one particularly good deal, but he was not the multi-millionaire who he and Mark Pattinson pretended him to be.’
The court heard the three men carried out the fraud using six phoney letters relating to ‘non-existent accounts’ to convince EFG to part with the money.
Jurors heard four of the documents stated Shepherd was the beneficial owner of an account containing £51.4m, while two further letters claimed he had access to a second account holding £25m.
The letters named a series of off-shore companies for which Shepherd was said to be the director and beneficial owner of, and some named Steele as having power of attorney for those accounts.
‘All six of these letters were part of an ongoing scam carried out during July and August 2008 in which Shepherd and Pattinson tried to persuade, and sometimes succeeded to persuade, a number of people to believe that Shepherd was the beneficial owner of all that money.
‘None of these letters came for Bank Julius Baer and the accounts named in these letters never existed at all.
‘Shepherd did not have a penny piece invested with Bank Julius Baer.
‘They were forgeries designed to deceive the people to whom they were given.
‘Kevin Steele accepts that during July and August 2008 he knew about at least five of these six letters and he was involved in the content of one of the final two.
‘The real issue that you have to decide is whether he knew that these letters were false.’
Mr Aaronberg said it was the ‘spectacular use of these false letters’ and a written undertaking signed by the four partners of Mischon de Reya which convinced EFG to hand over the loan to Shepherd.
He told the jury the undertaking had been prepared by Steele before being signed by his three fellow partners.
‘It was an undertaking which provided warranties as to the existence of the monies in the bank accounts which, as I’ve told you, never existed,’ he said.
‘The Crown’s case is that the other three partners in Mischon de Reya were deceived in signing this document because each of them trusted Steele as a fellow partner.
‘He prepared this document and each of them believed that he would not have said anything in it which was untrue and each of them was persuaded that in the circumstances it was perfectly proper to sign on the dotted line.’
Steele is also alleged to have abused the Mischon de Reya client account by allowing around £7m of the 20m Euros paid out by EFG to be credited into it.
He is then said to have transferred £1.8m to law firm Dundas and Wilson.
Mr Aaronberg said: ‘We allege that that payment was made dishonestly and when Kevin Steele authorised that payment he was potentially exposing his partners to risk of losing that £1.8m.’
Steele (19) Forge Drive, Claygate, Esher, Surrey, denies charges of conspiracy to commit fraud by false representation between July 20 and August 22, 2008, and conspiracy to use false instruments between May 8 and August 22 of the same year.
His alleged co-conspirators Shepherd and Pattinson have both pleaded guilty to the two.
Steele also denies commiting fraud by abusing his position at Mischon de Reya in the firm’s dealings with Shepherd between October 10, 2007, and September 4, 2008.
Pattinson, of (4) Sharley Fold, Longridge, Preston, Lancs, admitted two charges in November 2010, while Shepherd, of (67) Wellington Road, Lancaster, Lancs, entered guilty pleas on September 22, 2011.
The trial, which is expected to last up to four weeks, continues.
ENDS
