Levitt company 'riddled with fraud': Court told that books were 'rigorously cooked' to show pounds 13m loss as profit

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The Independent Online
ROGER LEVITT'S apparently thriving financial services company was 'riddled with fraud, forgery, deception and downright dishonesty', the Central Criminal Court was told yesterday.

David Cocks QC, opening the case against Mr Levitt for the Serious Fraud Office, said the Levitt Group was 'an empty shell making huge losses'. He said the firm was able to keep trading, until it collapsed with debts of more than pounds 34m in December 1990, only because Mr Levitt secretly and fraudulently injected about pounds 22m to shore up his ailing company.

Some of the money came from Frederick Forsyth, the thriller writer, who was one of Mr Levitt's wealthy clients. Mr Cocks said Mr Forsyth lost about pounds 900,000.

Mr Levitt, 44, and three former senior colleagues deny one charge of fraudulent trading, which alleges they produced false accounts, fraudulently injected funds and misled the financial regulator, Fimbra.

Mr Cooks said: 'So rigorously and thoroughly were the books cooked that the loss of pounds 13m in the 18 months to June 1990 was turned into a profit of about the same amount. Overstating your profits to the tune of pounds 26m - could you get a much more massive manipulation of the accounts than that?'

The four defendants forged fee notes and invoices to make it appear as if the pounds 22m had come from Mr Levitt's work for clients, the jury was told. The prosecution alleged that to cover up this massive capital injection, the Levitt Group sent false accounts to Fimbra. Stoy Hayward, the company's auditors, were also 'taken in'.

Mr Cocks said Mr Levitt told Fimbra 'what he later admitted were a series of lies about the origins of the money, disguising it as income'.

Levitt Group also told its bankers 'whoppers' about its profitability to assure them about overdrafts totalling pounds 7.3m, Mr Cocks said. 'Simply no one would have dealt with it if they'd known the truth.'

Mr Levitt allegedly told police 'that although he injected money into the company, he was no good at figures. He could not read a set of accounts'.

Mr Cocks said that Mr Levitt orchestrated the fraud but each defendant knew what the company's true financial position was.

Mark Reed, 40, was group managing director and, Mr Cocks said, Mr Levitt's right-hand man. Robert Price, 42, was finance director. Alan McNamara, 29, joined the Levitt Group on a salary of pounds 8,000 but quickly rose to earn pounds 135,000 a year.

Mr Cocks said: 'His salary and position reflect the fact that he had been bought up, in effect, by Mr Levitt.'

The trial continues today and is expected to last at least three months.

(Photograph omitted)

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