The Serious Fraud Office gained an unprecedented victory yesterday, securing custodial sentences in the court of appeal for a pair of convicted fraudsters who two years ago had escaped with "too lenient" fines and community service for their part in an illegal share support conspiracy.
It will be the second spell in jail in under two years for Michael Ward, former chief executive of Dublin-quoted European Leisure, the company whose shares he conspired to ramp during a successful bid for rival Midsummer Leisure in 1991. He was jailed in September 1995 for one year on a related charge of making false and misleading statements during the SFO's investigation of the share support operation.
Michael Ward, 49, the former Morgan Grenfell and Warburgs banker who lives in Mayfair's plush Chester Square, was sentenced yesterday to two years in jail while his former deputy chairman, Jeremy Howarth, received a 20-month sentence.
Two years ago the two escaped with fines of pounds 63,000 and pounds 151,000 respectively and 220 hours of community service. A third co-defendant, George Hendry, who received a conditional discharge in 1995, was given a 12-month sentence, suspended for two years, on the grounds of ill-health.
The original fraud revolved around Mr Ward's attempts artificially to inflate the value of European Leisure's shares to ensure the success of a bid for Midsummer Leisure. In its case, the SFO painted a picture of an elaborate share-support scheme which involved a Jersey taxi-driver, a Scottish contracting firm and a company controlled by an Egyptian business associate of Ward.
After the fraud came to light, and knowing that he would be interviewed by the SFO, Ward recruited an associate, Brook Anderson, to give him a bogus receipt concerning the sale of furniture for pounds 89,000 to explain movements of cash through his accounts. The forgery of that document prompted the second case in late 1995 that led to his previous jail sentence.
Yesterday, Lord Justice McCowan, sitting with Mr Justice Jowitt and Mr Justice Hooper, ruled the original fraud sentences were "unduly lenient".
In addition to the jail sentences, Ward and Howarth were each banned from becoming company directors for seven and five years respectively.
Giving the decision, Lord Justice McCowan said, "We grant leave as we consider the sentences imposed were unduly lenient.
"The scheme was masterminded by Ward. The companies involved were international companies trading on the London Stock Exchange. The fraud involved careful planning and substantial dishonesty. An important element in sentencing must be the deterrent element.
"It is important that people carrying out something like this should know they face a real chance of going to prison."
The two were given 48 hours to put their affairs in order before starting their sentences.
Charismatic and eloquent, Ward enjoyed a brief period as the darling of the Irish Stock Exchange after in 1987 he acquired the Edenderry Shoe Company as a shell for his ambitions in the leisure sector. He built up a chain of nightclubs in Spain and Paris and he owned the famous Hippodrome in London.
Ward's nemesis, however, was the takeover in 1991 of Midsummer Leisure, a company then valued at pounds 87m. To secure control of Midsummer, Ward had to maintain the value of European Leisure's shares and to do that he masterminded illegal share purchases with a combined value of pounds 400,000, the SFO believed.Reuse content