After a short summer break in which George maintained a strict dietary schedule to return to pre-season in the best of condition, George, Andy and I return to discuss the major story in town, the collapse of the Friedkin bid, the reasons why and the short and medium term consequences.
As difficult as the full story is, essential listening to understand the position we find ourselves in.
The Talking the Blues Podcast is available, as always, free of charge and advertising on all major podcast platforms, links to which can be found here
As ever thanks for listening – or reading, the transcript will be released on Sunday morning, 21st July.
Categories: podcast
Paul, is it likely Friedkin knew the complexity of the 777/Acap situation and by paying off Bell,Dowling ect, the £200m would put Friedkin in a favourable leverage position in the future if…a’ Moshiri wakes up to reality…b’ Acap cut their losses..c’ administration arrives. At the moment things look bleak for us, but as one door closes another opens, let’s hope it’s sooner than later.
Regards Maxwell
Hi Paul,
I can only base my conclusions on the details you have provided and one or two open source articles. You and I have discussed my law enforcement history but safe to say that since 2002 (when PoCA was introduced to the U.K.), I have been engaged in investigating these offences and dealing with the outcomes since then at a local, regional, national and international level including the USA. For the last 12 years I have also been training others in law enforcement to do the same so I can speak with some certainty. Again based on the information available to date.
If I was speaking directly to TFG, I would be starting that conversation by saying there is not a cat in hells chance that EFC can or would be implicated in a money laundering case. That’s the short answer.
Given that we have a loan that needs repaying I would also say that any horse trading or trimming of that debt may well be off the table IF a criminal case is pursued successfully. That’s simply because Leadenhall is the victim and the victim would be entitled to recover what it lost. That would certainly be the case in the U.K. ( I can’t speak directly to US criminal law for victims), and PoCA can be used (via the confiscation process) as a vehicle to ensure that happens in full IF the funds are there to repay it. THAT DOESN’T MEAN THAT EFC ARE LIABLE IT MEANS 777/A-CAP WOULD BE.
Back to EFC.
Based on Leadenhall’s publicly reported allegations, they have provided legitimate funds to A-CAP/777. If that arrangement is subsequently identified as fraudulently obtained by A-CAP/777 then whatever they do with it becomes criminal property under POCA, Part 7 – Money Laundering. When they pass on that criminal property it always remains criminal property and subject to recovery under the same Act. Again, that doesn’t implicate EFC in a money laundering case, it merely allows investigators to track the money as it goes from one to another.
However, PoCA also has a defence to ML which is regarded as the “Tradesmen’s Defence”. EFC have obtained a loan from 777 at a widely reported expensive rate but within the industry standards.
777 had all the legal and necessary accreditation to offer the money. It would not be the role of the customer (EFC), to go beyond doing due diligence on 777 and I may go as far as A-CAP but that’s not at all a certainty. There would be a VERY limited responsibility on the customer to ensure they are not receiving criminal property (the loan). An example might be that 777 demonstrate to EFC that they have received the money via A-CAP and if they were particularly responsible they may admit it is part of the loan agreed with Leadenhall. But that wouldn’t be required to comply with ML regulations (not the Act) or POCA 2002. Ultimately, EFC received a comparable product (the loan), for a comparable price and that lies at the heart of the tradesmen’s defence and protects legitimate customers like EFC or you and I for that matter, from becoming entangled in criminal proceedings when criminal property (by definition) comes to us in a seemingly legitimate fashion.
So, hypothetically, unless Moshiri wants to blatantly admit to being part of a conspiracy to defraud Leadenhall in the first place, there is NO case to answer on criminal or for civil recovery purposes.
But I will go back the earlier point (because I think it’s relevant to TFG), that a haircut or discount of any kind on that loan would seemingly not be possible IF criminal charges were brought and that appears to be the point here. Both on any potential damage to their reputation and the financial cost of having to make the full amount available to the courts to dissipate to Leadenhall. Any criminal court dealing with money laundering and the subsequent confiscation proceedings, would expect organisations like TFG or EFC to make the full amount repayable. Remember this is criminal now, not what some may consider to be astute financial negotiating.
Two final brief points.
The USA and the U.K. have the necessary mutual assistance framework in place for either side to recover the proceeds of crime on the others behalf BUT that alone will take at least 12 months to secure AFTER a conclusion to a court case. So we are not just looking at the court case, we must also look at the completion of the international processes to allow that to happen.
U.K. POCA law would certainly allow EFC / new owner to make that full debt available in any successful criminal proceedings, without delay and paid directly into HM Court Services, I fact I would go as far as to say that it would be expected to make it available at the earliest opportunity.
Secondly, it may come as a surprise to some but despite POCA being around since 2002, there is literally a handful of barristers in the U.K. that would regard themselves as experts in the field. So it doesn’t surprise me at all that any legal advice obtained by TFG on POCA matters has aired on the side of extreme caution.
I would be utterly amazed (even by Everton standards) if EFC are at all implicated in these matters. They may well be a witness to it but no more than that.
Regards
Keith
Thanks Keith, I welcome your wisdom and experience in these matters, you certainly add to the debate and provide expert opinion which I for one would not dare challenge/ It was certainly the case that several of the interested parties prior to TFG’s exclusivity had major concerns over the issues raised. Thanks for your contribution
Keith’s contribution does lay bare distance between Everton and the implications of the New York Court case., though demands on the payment of the £200m loan are possible .The haircut reason for the collapse has also been laid to rest.
So the focus is now on the procrastination of Fredkin Group and the time frame of the takeover.Which you would think could be overcome by the of the Friedkin Group will to do so.
It looks like more of a collapse in the Friedkin /Moshiri relationship , which was always a possiblity.
I see that Moshiri is a Certified Accountant , not a Chartered Accountant., though he can call himself a Chartered Certified Accountant ,which he does in Wikipieda.Certified is a more straight forward path to becoming a qualified Accountant.
Thank you for your excellent forum of information Paul as always .Glad your health , more importantly , is heading in the right direction.Keep up the good work and Good Luck.