Business crime extradition round-up

Despite COVID, it has been a busy year for England's extradition courts with a flurry of high-profile requests, ranging from espionage to securities fraud.

In this article, Ben Ticehurst and Kamila Kwincinska of Howard Kennedy's Business Crime team provide a round-up of the year's major cases and discuss the trends to look out for in 2021.

Julian Assange

The extradition proceedings against WikiLeaks founder have been in the spotlight this year.  Mr Assange faces 17 charges under the Espionage Act 1917 in the US for “unlawfully obtaining and disclosing classified documents related to the national defence,” as well as for conspiring to hack into a Pentagon computer network.

Mr Assange contests extradition on the ground that, having been charged with espionage, his extradition is barred by the definition of political offence within the UK-US Extradition Treaty. He also relies on his Article 3 Convention rights by reason of pre-trial prison conditions and his deteriorating mental health.

Following a four-week hearing held at the Old Bailey, District Judge Vanessa Baraitser has said she will pronounce judgment on 4 January 2021.

Michael Lynch

The former co-founder and CEO of the software company, Autonomy Corp, Michael Lynch – once described as Britain's answer to Bill Gates – was arrested in February on a US extradition request for allegedly orchestrating a massive fraud by artificially inflating Autonomy’s value ahead of its $11 billion sale to US computer giant, Hewlett-Packard Co. (HP) in 2011. He faces 17 criminal charges including wire fraud, securities fraud and conspiracy to defraud.

Lynch is expected to contest extradition pursuant to the forum bar, on the basis that the alleged conduct took place in the UK. In fact, the UK's Serious Fraud Office investigated the deal between 2013 and 2015 but discontinued their investigation on the grounds of insufficient evidence. Lynch is also expected to argue that pre-trial prison conditions in the US are so poor they breach Article 3 of the European Convention on Human Rights (ECHR).

The case is set to be heard on 8 February 2021.

Note: Lynch is also facing a civil suit in the High Court in London, with HP seeking $5 billion (£3.8 billion) in damages in connection with the same fraud allegations. The parties are currently awaiting judgment following a 10-month trial, in which Lynch gave evidence for over 20 days. Legal costs are said to exceed £36 million.

Vijay Mallya        

Mr Mallya, an Indian tycoon and self-proclaimed "King of Good Times" is wanted by India to face charges of conspiracy to defraud, making false representations and money laundering relating to loans taken out by his now-defunct Kingfisher Airlines.

Mr Mallya resisted extradition on the grounds that there was no case to answer (prima facie case), his prosecution was politically motivated and that he would not receive a fair trial in India. He also argued that prison conditions in India are so poor, they breach the minimum standards required by Article 3 of the ECHR.

Following the Secretary of State’s order extraditing him to India, Mr Mallya appealed to the High Court. He argued the decision on a case to answer was wrong, including the admission of witness statements pursuant to section 161 of the Indian Criminal Procedure Code. In April 2020, the Divisional Court dismissed the appeal, finding that the district judge was right to admit the evidence that she did and was entitled to find a prima facie case against Mr Mallya.

Following an unsuccessful application for leave to appeal to the UK Supreme Court in May, the Indian tycoon is now understood to have applied for asylum in the UK. Britain’s Home Office typically takes six months to determine an asylum application but the applicant can extend that by many months, even years, using the full appeals process. The multimillionaire's removal to India cannot be effected until the application and any appeal has been rejected.

Nirav Modi

The diamond jewellery designer, Nirav Modi is wanted in India to face trial in an estimated $2-billion Punjab National Bank (PNB) fraud case. The charges concern the allegedly fraudulent use of a credit facility offered by PNB or LoUS in connection with his companies Diamonds R Us, Solar Exports and Stellar Diamonds.

As with Mr Mallya, the diamantaire resists extradition on the ground that there is no prima facie case against him. He is also arguing that he would not receive a fair trial and would be held in very poor prison conditions.

On 3 November 2020, District Judge Goozee concluded that he considered himself bound by the decision in the case of Mallya and found that the evidence submitted by the Indian authorities to establish a prima facie case of fraud and money laundering against Modi was broadly admissible.

The case is now set for a two-day extradition hearing at Westminster Magistrates' Court on 7 and 8 January 2021.

Arif Naqvi

Former Abraaj Group Chief Executive and founder, Arif Naqvi stands accused of defrauding investors in Dubai-based Abraaj, once the largest private equity firm in the Middle East. Federal prosecutors in the Southern District of New York (SDNY) unsealed securities and wire fraud charges against him last year. Mr Naqvi is among several people charged by US prosecutors with being part of an international scheme to defraud investors, including the Bill & Melinda Gates Foundation.

The Pakistani business magnate contests extradition on the ground that prison conditions where he is likely to be detained pending trial in the US- the Essex County Correctional Facility (ECCF)- are so poor that they would violate his rights under Article 3 of the ECHR. He also argues that he would not receive a fair trial.

The ECCF is a facility that was put forward as an alternative to the New York's primary federal pre-trial facilities, the Metropolitan Correctional Centre (MCC) and the Metropolitan Detention Centre (MDC), by the US DOJ. In an unprecedented move this summer, following concerns raised by Mr Naqvi, the DOJ told Westminster Magistrates' Court that it would not oppose bail for Naqvi pending trial in the US. It also assured the court that if bail was denied, Naqvi would not be held in either the MCC or MDC.

At the start of the final three days of Naqvi's extradition hearing before the Chief Magistrate, the expert witness for the Abraaj founder told the court that the situation at the ECCF was "chaos". The court also heard that the New Jersey based ECCF was at least an hour long drive both ways from the SDNY courthouse.  The expert witness noted that it would be very difficult for Naqvi to consult with his layers during the trial, which was in itself a breach of his right to a fair trial.

Final written submissions are due from both sides by 8 January 2021 with a judgment from the Chief Magistrate by the end of January.

Christopher Taylor

A 58-year-old carer from Wigan, Mr Taylor was wanted in the US to face trial alleging one offence of wire fraud and two of computer fraud. Mr Taylor is alleged to have hacked into 772 webcams in 39 countries between August 2012 and July 2015 by tricking victims into downloading software that gave him access to their computers, allowing him to install software that took control of their webcams.

Mr Taylor resisted extradition pursuant to the forum bar, arguing that as most of the victims were based outside of the US, including several in the UK, the appropriate forum to prosecute him was in the UK.

On 7 December 2020, Westminster Magistrates' Court discharged Mr Taylor's extradition finding that it would not be in the interests of justice because of his strong family links in the UK and that any prosecution for the offences should take place here.

The US government has indicated its intention to seek permission to appeal.

Jeremy Eason

Mr Eason was sought by the US to stand trial on charges of a $5m mortgage fraud. In 2011, while resident in the USA, Mr Eason had been interviewed on a voluntary basis by the FBI about his work as a mortgage broker. However, the US authorities took no active steps either to try to locate him or to inform his attorney that they wished to prosecute him, until issuing an extradition request in 2018.

In February 2020, the Divisional Court found that Mr Eason's extradition would be both unjust and oppressive due to the 12-year passage of time since the alleged commission of the offence and the appeal hearing. The court held that the clear, culpable delay by the US government had created a real risk of prejudice to Mr Eason, through the destruction of material evidence, the loss of access to other evidence as well as the natural fading of memory due to the passage of time.

Arturs Zaharevic

Arturs Zaharevic is accused by the US government of being a ringleader of the QQAAZZ group, said to provide money laundering services to cybercriminals in an international conspiracy. The cybercriminals are said to have used malware to gain access to and steal from individuals’ bank accounts. Mr. Zaharevic is accused of opening hundreds of bank accounts in the UK, Portugal, Bulgaria and Switzerland using false identity documents to launder tens of millions of dollars of stolen funds from victims worldwide.

Mr Zaharevic's defence relies upon the question of forum, in that, as a long-term UK resident, his alleged activity could only have taken place from the UK. He argues that, while some of the victims of the theft are based in the United States, the prosecution allegations of providing a money laundering ‘service’ relate to acts outside of the US, namely the UK and elsewhere in Europe.

Judgment at the magistrate's court is scheduled for 18 January 2021.

Conclusion

Despite Brexit and the global pandemic, there has been increased activity in the number of extradition request from several countries, particularly the US, and this trend is likely to continue in the New Year. It also seems that Russian cases are back on the agenda again. Following a hiatus of a year or two, a recent change to the law in respect of Regional Human Rights Commissioners has allowed the Russian Federation to rebut claims of non-compliance with human rights standards and point to the effectiveness of monitoring of assurances.

At Howard Kennedy we advise on all aspects of business crime related extradition. Advising on both outbound and inbound extradition requests and through our international networks we work with a number of top-ranked extradition lawyers and have access to legal experts in most jurisdictions.