by Neil Wild
"It certainly was a risky exercise for a Building Society to have taken, but why the criminal charges. What is the basis of the conspiracy charge?"
"Well to deal with your first question, there always has to be a fall guy. One person it's not going to be is your friend Mr. Masters. The man who persuaded members of the public who had accounts with the Society to take a relatively small payoff in order to turn a perfectly respectable mutual Building Society into a Bank, and then induced slick Yankee investors to put money into the Bank is not going to admit that he made a commercial mistake."
"And he's a bastard"
"Well, you should know!"
"But if Newberry was accurate in his valuations, and if he did not make the lending decisions, how can he be charged with any criminal offence?"
"Well the problem does appear to be in the valuations."
"They were bent?"
"Of course not; at least David is adamant that they were not, but I am sure that you know from your experience that valuation is something of an empirical science; shades of grey as opposed to black and white."
"And so?"
"And so, apparently the Prosecution have a witness, a surveyor just like David, who says that David overvalued them at the time. "
"And that's what this is all about?"
"Well not quite. That would be too flimsy to prosecute; it would be a battle of experts, one for the Prosecution and one for the Defence, and the Prosecution could never prove beyond all reasonable doubt, that David's figures were wrong. The actual charge is conspiracy to defraud, and alongside David in the dock are the Developer, and the Developer's solicitor."
"I see. Well that's a cop out for a start, as any prosecutor knows. If you don't have any hard evidence, use conspiracy . Create enough prejudice to convince a jury that there must have been some dirty work, and get a conviction that way. What's David's defence?"
Mortimer shrugged his shoulders. "'Not guilty. I did nothing wrong'."
"So in effect we've got to prove a negative?"
"Looks like it. Look this is all I can really tell you."
“Gee thanks.” Said Brakespeare. “Your baby now.” was Mortimer’s parting shot.
chapter five
Brakespeare turned to the witness statements The first one was from the other Chartered Surveyor, John Black who was a staff surveyor with the large London firm of Redshaw Linden and Steele. Brakespeare had often seen their For Sale or To Let boards on his visits to the Capital. He remembered that there had been a To Let board on the office block just across the road from the Solicitors Disciplinary Tribunal in Farringdon Street.
It took him half an hour to digest the contents of Black’s statement, and then, only with the help of a notepad upon which he could jot various figures down.
It appeared that Black had been asked to retrospectively value the properties, and he had produced a chart giving his valuations, together with the values that David Newberry had allegedly given for them at that time.
In each case Newberry's original valuation of the properties was above Black's, and a table showed percentage differences ranging from 8.1% to 51% higher. The statement pompously concluded:
''I have set out the Percentage difference in the estimated capital values between the original valuations carried out on behalf of the Society and my estimate of the true market value of the properties on the relevant dates.
In my experience where there is a difference in value of less than 5% I would strongly recommend that no action is taken on the basis that it would be very difficult to prove that the valuations are in any way untoward.
Where there is a difference in value of between 5% and 25% these are in a ''grey area" and in my view, open to challenge. Reliable comparable evidence is the true test in such circumstances.
Where there is a difference in value of more than 25% then serious consideration should be given to appropriate legal action. "
Brakespeare added up the figures on a calculator.
If Black were right 17 properties had been overvalued by just under £3,000,000.00 or almost 50%.
Brakespeare whistled, sat back in his chair and studied the ceiling of his office. As naturally suspicious as any lawyer is by training, he could see that a jury faced with this information would need to see or hear some very convincing contradictory evidence not to convict.
Brakespeare was surprised at how quickly he managed to read the remaining statements, which, as often happens in fraud cases, merely confirmed facts and produced documents. No-one ever stands and watches a fraud taking place.
Interestingly, he noticed, there were a number of statements from surveyors who had worked under Newberry, and who confirmed that they had carried out valuations on some of the properties around which the charges centred, but said that they had never been put under any pressure by Newberry as to the amount of their valuations. Brakespeare could not see how these advanced the prosecution case. In fact they contradicted it. Was this sloppy preparation?
There was a final statement, which produced copies of the Company House records for Clearfield Properties. It appeared the majority of the shares were owned by Jonathan Levy. There was no mention of Newberry’s name. Strange if Newberry were supposed to have an interest in it!
Well that at least excluded his current employers from any involvement. No mention of the partners names.
Finally, there was the transcript of a long interview by the Police with Newberry. Brakespeare was surprised that it was conducted by two Detective Constables. Bearing in mind the sums involved, and the status of the National Building Society as one of the most prominent mortgage lenders in the country, he would have expected at least a Detective Inspector to have been involved. He decided that that would wait.
"OK" thought Brakespeare, "so the picture is that some dodgy valuations were carried out on properties owned by Levy's company, but where does Newberry fit in?". He blanched at the thought of having to read through the pile of exhibits, but he knew that it would have to be done.
“Lisa?” he mused.
As if on cue, the door opened, and Lisa came in smiling.
"How's it going"
"Well I've only looked at the tip of the iceberg. It doesn't look at all good for our Mr. Newberry."
Her face fell. "The partners won't like that".
Mel, the journey and concentration had made Brakespeare tired, and he momentarily forgot himself.
"Sod the partners. I haven't got a magic wand. I can only tell you what I've found" Lisa inadvertently took a step back from where she stood in front of his desk.
"I'm sorry," said Brakespeare, "I shouldn't have said that.” He paused and looked at her. “Quite honestly I'm scared that I'm not going to be able to do anything. "
Why had he said that to a girl he hardly knew?
Lisa recovered and smiled again. "That's OK It's already forgotten. Is there anything I can do to help?"
Brakespeare gestured to the pile of papers. "I wish there were, but at this stage all I can do is read this lot and try and try to come to grips with the case. "
"Couldn't I do that for you?"
"Ever done any criminal work?"
"Well I've taken witness statements for Gordon, and sat behind Counsel in Crown Court .. "
"Would you know what to look for?"
Her smile broadened. "Do you?"
Brakespeare smiled back. "Touché. No I don’t, but I might be a little quicker at finding it." He didn’t want to upset the girl, but at the same time wanted to keep her interested in the case.
"Where are you up to now?"
Brakespeare explained the evidence had had read so far. "But I still can't see how Newberry was physically involved,” he added, “I was looking for a case summary of some sort but there doesn't appear to be one "
"Have you looked in our working file. I'm sure that something came in last week."
"Good girl, where is it?" said Brakespeare without meaning to be as condescending as he thought that
he sounded”.
"I knew I could be useful to you," said Lisa giving him a knowing smile as she walked over to one of the filing cabinets. She opened a drawer. "Here's the correspondence file, among the "Ns" and here," she pulled a sheaf of papers out of the file with a flourish, "where Margaret has systematically filed it so that no-one can find it, is a document headed' Prosecution Case Statement"'.
She handed it to Brakespeare, and sat down opposite him at the desk while he started to read it.
He looked at her knowingly. "And now the moment of truth. "
The document was 4 pages long and consisted of numbered paragraphs. Brakespeare read the contents out loud so that Lisa could hear.
1. Whilst this document is not intended to be exhaustive of the case against Mr. Newberry it is an indication of the evidence on which the Crown intend to rely.
2. Mr David Newberry was at all material times the Area Surveyor for the National Building Society for the area that covered the Greater London Area and as such was in overall control of the survey department in that area. The other surveyors within the team had to report to him. He was therefore responsible for the preparation of some of the valuation reports in respect of the security that was being proffered as the basis of the loans.
“That’s interesting”, said Brakespeare, as he paused from reading. “he only carried out some of the valuations. So why haven’t the other surveyors charged”
Lisa looked at him blankly.
“Don’t worry, it’s a rhetorical question!”
3. He was a member of Clearfield Properties Limited from it's inception
3.1 business plan dated 28.11.84 (Exhibit XAC1.23) reflects Newberry's 10% shareholding as "anonymous".
"I'll find it." Said Lisa without prompting. She went to one of the boxes, and squatted down on the floor in front of the pile of documents. Brakespeare could not help but notice how she managed to squat on the carpet with her feet either side of her thighs. Lisa noticed his gaze.
"Double jointed" she volunteered.
"Useful" Brakespeare replied, nodding his head in appreciation, and thought of Mel. After all she was a dancer, but he had never seen her do anything like that in the positions they had tried.
Brushing her long hair back from the side of her face, Lisa hauled out a volume of papers some 3 inches thick.
"Here it is, volume XAC 1. "
"Page 23?"
Lisa opened the volume at the page, and quickly glanced at it. She stood up, then handed it to Brakespeare, and unselfconsciously walked to behind his chair and leaned over his shoulder. She was totally absorbed in looking at the document, but Brakespeare could not help but be aware of the warmth of her body and it's faint perfume.
The document was a mass of figures and projections, but at one section there was a list of shareholders. Sure enough someone was listed as "anon" and had been allocated an 10% shareholding.
"Yes, well?" asked Brakespeare.
"Proves nothing, does it?" asked Lisa from somewhere near his ear. “There must be millions of ‘anons’
"Right. What's next?" Brakespeare returned to the Case Statement.
3.2 This is reinforced by the note found at the same time which stated "Don't mention David's name"
"Now where's that" said Brakespeare.
Lisa lent forward and turned the pages of the volume. "Here you are, next page"
It was a manuscript note at the foot of another page of figures. It looked from the photocopy as if it had been written in pencil.
"Hmmm."
"Not so good?" asked Lisa.
"Well, if David is Newberry, why would his name be referred in a note in what was quite clearly a private document. Where did the Police get hold of this anyway?"
Lisa reached forward to the separate bundle of witness statements on desk. Brakespeare was pleased to feel the tip of her breasts touch his arm.
"Oh, yes here we are in the index. Bundle XS 1 - documents removed from Jonathan Levy's office. Taken by DC Durkin”
“Durkin. That name rings a bell.” mused Brakespeare.
"Look at what the summary says next" said Lisa, who had been looking ahead.
3.3 By 3rd November 1987 Newberry had lent £10,000.00 to the company (Exhibit XAC1.163) a figure also revealed in March 1988 (Exhibit XAC1.316)
"Oh Jesus." said Lisa.
"You may well be right". Brakespeare replied. "Personally I would use a stronger expletive. Let's look at these references."
The exhibit at page 23 turned out to be a copy of a letter from Levy to Newberry acknowledging receipt of his "loan cheque" for £10,000.00. Page 316 was a summary of the company's capital and it's sources. Newberry's name was recorded against the figure of £10,000.00.
Lisa stood back from Brakespeare, and folded her arms.
"It does seem to me that if Mr Newberry lent money to a company with whose properties he was involved in the valuations, then he has some questions to answer." She said from behind him.
"Well he sure has, but that doesn't mean that he's necessarily in the mire."
"When I came in, you were all doom and gloom about him. " She moved round to the front of the desk.
"Well I was, and still am, but the trouble is that I like a good fight, and when I see evidence like this, I start to think of ways around it all."
"Like"
"Like, yes he would certainly have a conflict of interest, but that does not mean that he would necessarily be involved in fraudulent valuations. There’s a big gap between behaviour being slightly murky in character, and a criminal act."
Lisa stood in front of him, and folded her arms. She put her head to one side and looked at him. "Mr. Jonny Brakespeare. Do you think that a jury is going to believe that."
Brakespeare looked back at her and smiled. He was beginning to find this girl very attractive.
"Let's pass on that one and read on shall we?"
Almost obediently Lisa came back to his shoulder as he picked up the Case Summary and read it out loud once more.
4. He failed to disclose his interest in the company to the Building Society, and knew that this was compromising his employment;
4.1 In his own words in interview 'if they had come to the National it compromised my position.’ (Exhibit XI2. 147)
“Whose ‘they’?” asked Lisa.
“Clearfield, I presume.”
"Hold right there" cried Lisa as she dived away to the files of evidence and came back with another large volume which she put on Brakespeare’ s desk, and started to navigate her way through the pages.
"Here we are; the Police record of his interview. Have you read this?"
"Come off it"
"Just asking." She smiled a knowing smile at him. They read the extract together. It was not quite what the summary suggested. DC Durkin had asked.
“If you had an involvement in Clearfield at the time of the surveys, you would have had a conflict, if the company had applied for a mortgage at that time, wouldn’t you?”
To which Newberry had replied,
“Yes, if they had come to the National it would have compromised my position.”
"Well, that’s certainly not an admission. He’s talking conditionally." said Brakespeare. “Let’s move on.”
“4.2 He valued 39 Hardenham Road (Exhibit XBJ.9) in September 1988 and again on 12th November 1988 (Exhibit XBl.38/45) “
The Exhibits recovered by Lisa from the papers were valuations on National Building Society forms, with Newberry's name typed in as the Valuer, and signed by him.
“5. Newberry was essential to the smooth running of Levy's companies
5.1 See the letter he wrote to Clive Holmes on 9th December 1988 (Exhibit XMA3. 1) “
The letter was in fact a memorandum written on National Building Society stationery by Newberry to one of his staff surveyors. It told Holmes that Clearfield properties was a valued customer of the National, and could be relied upon to have "well thought out" any schemes for which they borrowed.
6.1 for example 4 Croftfield Road. (Exhibits XB4.9, 245) and 252). John Black when revaluing the property found that it had been overvalued by almost 100% of it's true market value (see Exhibits XSJ.247 - 249) “
"Well that's an exaggeration." said Brakespeare "I looked at those figures earlier. Look, here we are," he rummaged to find Black's statement and his notes, "even Black only puts the overvaluation at 51%"
"It's how you look at the figures, isn't it" said Lisa, from her position at his shoulder. "Black valued Croftfield Road at £245,000.00"
"Newberry at £500,000.00"
"Well that's twice as much, so it would be a 100% increase"
"Yes, but look what Black says; the difference is 51%; his valuation is 49% of Newberry's"
"Does it matter. Black's is half of Newberry's, so Newberry's is twice as much as Black's. It's the same thing. "
"Well, yes, but when their own witness uses the 51% figure, and not 100%, it’s pretty poor show for the Prosecution to exaggerate." He thumped the table in anger.
"You have a short fuse, haven't you?"
"No"
Lisa shrugged her shoulders. "I hate to think what you would be like if you had."
"I'll admit to being prickly" said Brakespeare warming to the banter.
"OK, Mr. Prickly, I'll accept that, but look, it gets worse. " She took over the reading.
