On 4 April 2023, sentences totalling over 13 years were handed down to three executives behind the Balli Steel plc $500m fraud.
Nasser Alaghband, CEO, received a custodial sentence of 6.5 years. Two senior executives received sentences of over three years each. A further defendant was acquitted.
The case
Balli Steel plc bought and sold steel worldwide, funded by short-term trade finance loans. The company collapsed in 2013 with debts around $500 million to over 20 creditor banks.
The SFO’s investigation revealed that two executives, Melis Erda and Louise Worsell, both of whom were convicted in February 2023, provided banks with misleading information, false shipping documents and fake sales contracts to support the company’s borrowing.
Documents were certified by an in-house shipping company, which was registered in the Cayman Islands and operated purely by fax, via Balli’s own offices in Marylebone. The court heard that the fraud had been orchestrated by Alaghband in an attempt to keep his company afloat.
It was reported that law enforcement agencies in 36 separate countries provided evidence and information, which the SFO described as a “record-breaking degree of international co-operation”.
Enforcement
- The Balli Steel plc conviction marks the SFO’s 5th successful individual conviction in the past year, resulting in a total so far of over 61 years of sentenced imprisonment handed down. Following a 20-week trial, it was revealed in court that the cost to the taxpayer was ‘in the region of £2 million' whilst the cost of the SFO investigation surpassed £6m.
- This conviction closely followed the SFO’s largest seizure of money from a single bank account. On 17 March 2023, the SFO retrieved over $7.5 million from convicted money launderer, Mario Ildeu de Miranda, after an investigation uncovered that Miranda had funnelled the proceeds of crime using multiple international bank accounts. The SFO had frozen the UK bank account in August 2020 after having been alerted that the funds were linked to Miranda.
Contents
- Financial Crime Watch - May 2023
- Fraud Strategy: Stopping Scams and Protecting the Public
- Economic Crime Plan 2023-2026
- The House of Lords Fraud Act 2006 and Digital Fraud Select Committee Report
- Sanctions round-up - May 2023
- Money laundering and terrorist financing update - May 2023
- SFO secures first conviction for individual connected to Deferred Prosecution Agreement
Contributors
Helen Simm
Partner
Harriet Fitzsimons
Associate
Kim Roberts
Associate
Paul Wainwright
Partner
Jeremy Irving
Partner
Andrew Hopkin
Partner
You may be interested in...
Legal Update
FRC awards financial sanctions against MacIntyre Hudson LLP and two former employees for breach of audit requirements
Legal Update
FCA’s recent speech on teamwork: Will it target existing issues?
Legal Update - Financial Crime Watch
Financial Crime Watch: September 2024
Legal Update
Publication of Home Office’s Preliminary Findings and Direction of Travel in relation to the disclosure process
Legal Update
The downfall of Vesttoo: Fraudulent letters of credit
Legal Update
Failure to prevent fraud: how can my organisation prepare?
Legal Update
Fraud Strategy: Stopping Scams and Protecting the Public
Legal Update
The House of Lords Fraud Act 2006 and Digital Fraud Select Committee Report
Legal Update
Sanctions round-up - May 2023
Legal Update
SFO secures first conviction for individual connected to Deferred Prosecution Agreement
Legal Update
Fraud – early success for the SFO
Legal Update - Financial Crime Watch
Financial Crime Watch - May 2023
Legal Update
FCA warns that vulnerable to scams amid cost of living crisis
Opinion
Draft Bill published to establish a Register of Overseas Entities
The Government has this week published the Economic Crime (Transparency and Enforcement) Bill as part of its measures to crack down on foreign criminals using property in this country to launder money. The Bill proposes the establishment of a Register of Overseas Entities to be maintained by Companies House.