Judge says Crown investigators misled court after £5.6m seizure of assets

Published on Saturday 16 February 2008 18:58

THE Crown Office unit set up to seize the assets of criminals has suffered humiliating criticism from a judge for misleading the court in a landmark case.

In a judgment relating to a long-running legal case involving two men who are the subject of the biggest action ever undertaken in Scotland against alleged criminals, Lord Glennie found that Crown investigators knowingly misled the court.

Russell Stirton and Alexander Anderson were the subject of an unprecedented raid in January 2004 when their homes, businesses, other properties, cars and bank accounts – worth an estimated total of 5.6m – were placed under a restraining order, effectively freezing their assets. Even insurance policies and the bank accounts of Stirton's children, nephews and nieces were frozen under the new powers granted to the Crown by the Proceeds of Crime Act.

But Glennie, who was ruling on a motion for recall of the order, has heavily criticised the Crown's Civil Recovery Unit, which acts on behalf of Scottish ministers, saying they had breached "the duty of full and frank disclosure to the court" at an earlier hearing.

In February 2005, Lord Brodie confirmed that the assets should remain frozen, but the unit failed to tell the court that the alleged victims of the extortion accusation at the centre of the case had made sworn statements saying they had not been subject to any such crime.

The four-year operation is now entering its final phase and, while the Crown refuses to answer questions on the cost to the public purse of the case so far, informed sources estimate it will by now have exceeded the value of the assets frozen. The worrying scenario for the Crown and for the future of the Act is that Stirton and Anderson might be entitled to millions of pounds in compensation when all is concluded.

Ex-paratrooper Stirton is married to Jackie McGovern, a member of one of Glasgow's most notorious criminal families. Police believed a service station Stirton and Anderson ran in Springburn, Glasgow, was a money-laundering front for the McGovern criminal empire.

But a subsequent police investigation failed to provide any evidence of that.

By the end of 2006, the pair were told they would not face any criminal charges and were asked to forfeit just 200,000 of the vast frozen fortune. They refused the deal and demanded full proof of the evidence.

Since then, in an attempt to salvage the investigation, the Crown has focused on trying to show that Stirton and Anderson had extorted more than 800,000 from a taxi firm in Glasgow.

However, in obtaining an interim administration order in 2005, the Crown neglected to tell the court that the alleged victims of the extortion had made sworn statements saying they had not been subject to any such crime.

Lord Glennie's opinion, produced earlier this month, says that the directors of the cab firm denied there had been any extortion, denied statements attributed by the police and Inland Revenue as having been made by them, and maintained that position "to this day".

In a damning part of his judgment, the judge said: "The petitioners' failure to put this information before the court amounts to a breach of their duty of full and frank disclosure."

He said the Crown's "failure was absolutely central to the central allegation against the respondents". And he added: "Nor was it innocent, since the petitioners knew full well what the position was."

The judge said he has the clear view that the petitioners' failure to comply with their duty of disclosure was sufficiently serious to make him consider discharging the case.

However, he decided to give the Crown a final opportunity to make good its case, at the same time raising the likelihood that failure to do so could lead to Stirton and Anderson being heavily compensated from the public purse.