All six defendants in the Gresham Ltd case have now been jailed. Following the sentencing of Edward Davenport and two others in September, the remaining three convicted defendants, David McHugh, David Horsfall and Richard Stephens, were given custodial sentences by HHJ Higgins at Southwark Crown Court.
The sentences are as follows:
a) Richard Stephens (67) of Sheffield, Yorkshire: 4 years and 2 months' imprisonment. Previously known as Richard Kirkup, he admitted his part in the conspiracy.
b) David McHugh (54) of Warrington, Cheshire: 3 years and 8 months' imprisonment. He pleaded guilty to conspiracy to defraud.
c) David Horsfall (56) of Godalming, Surrey: 17 months' imprisonment. He admitted to fraud by false representation.
SFO Director Richard Alderman said, "In typical advance fee fraud fashion, Gresham was an empty puff wrapped in slick packaging and promoted through brazen lies. The defendants sentenced today might be thought of as the 'supporting cast' scripted to act as honest professionals to oil the mechanics of the fraud but this does not dilute their criminal culpability. I was determined that they too should be exposed to the full glare of justice".
In passing sentence, HHJ Higgins said, "It was a financial conspiracy at the highest level and this must be reflected in the sentences".
Outline
The fraud was based around a sham business, Gresham Ltd, falsely touted as having operated successfully for many years and able to offer millions in loans to applicants to start up or develop various kinds of business projects. Advance fee payments and/or due diligence fees totalling more than £4m are known to have been fraudulently obtained from corporate and individual business people claiming they were required to enable the applications to be vetted and processed. In reality, Gresham Ltd, was an organisation of no substance, no source of funds at its disposal to lend to those paying advance fees and no intention to honour any of its commitments.
Three others (i.e. Edward Davenport, Peter Riley and Borge Andersen) were convicted by a jury earlier this year in a separate set of proceedings and have already been imprisoned. An outline of the involvement of all of the offenders was published in an SFO press release dated 5 October 2011.
The defendants' roles
The persons sentenced today aided the advance fee fraud by acting as "professional advisors" engaged by Gresham to garnish the operation with an assurance of its stature and credibility. McHugh pretended to be, at various times a solicitor and an accountant, and to hold a doctorate in financial accountancy. He signed off Gresham Ltd accounts, as well as providing "comfort letters" to victims of the fraud. However, he possessed neither accountancy nor legal qualifications and has a number of convictions for offences of dishonesty.
Stephens acted as a "surveyor" routinely nominated by Gresham to visit the sites of proposed building projects in the UK and overseas to assess their viability. Although Stephens deceived some applicants into believing he was a genuine surveyor, others expressed concerns about his manner and his reports, which were of little substance.
He had no surveying qualifications but was chosen as a result of his close ties to Peter Riley. Stephens (under former name Kirkup) was sentenced to 3 ½ years in another SFO case in 2004 for his involvement in a criminal enterprise that bore strong similarities to the Gresham fraud.
Finally, Horsfall was a practising solicitor who ran a small conveyancing firm - Layard Horsfall solicitors - from an office above a shoe shop in Godalming.
Horsfall had a close relationship with Edward Davenport and was used by Gresham to provide written and oral re-assurance as a supposedly independent professional, to concerned or uncommitted applicants that the company was substantial and could meet its financial obligations.
The SFO will be seeking to confiscate the assets of all those convicted in this matter and will seek Serious Crime Prevention Orders ("SCPOs") in order to minimise the risk of further offending.
Notes for editors
1) The company Gresham Ltd that was created by Davenport is not to be confused with Gresham Financial Ltd, a legitimate financial advisory firm regulated by the Financial Services Authority. By adopting the name Gresham for his business, Davenport attempted to attach the image of the City of London financial district to his dishonest enterprise.
2) The Serious Fraud Office is a government department responsible for investigating and prosecuting serious and complex fraud. The SFO is headed by the Director (Richard Alderman) who exercises powers under the superintendence of the Attorney General. These powers are derived from the Criminal Justice Act (1987).
