Share trail leads to the dock

A British businessman is fighting fraud charges in a Portuguese court. Liz Nash reports from Lisbon

THE British businessman David Lowry, sporting a smart suit and an elegant haircut, appeared dignified and confident in Lisbon's criminal court last week as the Portuguese public prosecutor interrogated him about correspondence he had written as director of a company alleged to have been operating an international share scam.

Mr Lowry is charged with fraud, forgery and criminal association in a trial set to last until December. He denies the charges.

"I've got to clear my name," he said outside court. "My business is built on trust and I've done nothing wrong. I can't be tainted with even a hint of fraud."

Last year the Portuguese financial regulators, eager to demonstrate that financial and telecommunications deregulation offered no sanctuary for shady operators, pounced on Mr Lowry's telephone share-selling business and clapped him in jail on suspicion of swindling hundreds of investors.

Mr Lowry says the Portuguese do not understand the nature of his operations, which followed widely-used US practices.

He claims that the authorities' overhasty intervention destroyed the market for his shares, which were perfectly sound. He avows that the case against him is based on nothing more than unsubstantiated suspicion.

Liverpool-born Mr Lowry, 54, a graduate of Queen's University Belfast, has a distinguished career in Britain and the US as a law academic, tax consultant and investment broker.

He was detained on 22 April 1997 when police raided the Lisbon office of Paramount Portugal, a subsidiary of a Swiss share-dealing company that Mr Lowry set up in 1995 for a client who subsequently fell ill and died.

The prosecutor alleges that Paramount Portugal, employing more than 50 expatriate staff, telephoned investors around the world and persuaded them to buy shares in tiny American companies that proved worthless or of little value.

The prosecution claims that hundreds of people were defrauded of millions of pounds.

Police swooped on Paramount after Portugal's financial markets regulator, the CMVM, received complaints leading it to suspect the operation might be a scam.

"Scores of people complained they had lost large sums of money investing in worthless share certificates," said a CMVM spokeswoman.

Mr Lowry says he investigated Denmark, Ireland and Spain before opting for Portugal as base for the spin-off from the Swiss operation "purely on financial grounds: it had by far the cheapest labour costs".

He took Portuguese legal advice and was assured that if he steered clear of Portuguese stock and Portuguese clients he would not have to register the company - a consideration that tipped the balance in favour of Portugal.

On 22 March this year the Swiss federal banking commission closed the parent company, Paramount Securities and Trust, for violating a Swiss law introduced on 1 February 1997 that tightened rules on security dealing.

"This company had no address, no board of directors, no auditing company, nothing it needed to be a supervised dealer, so we closed it down," says Dina Balleyguier, legal spokeswoman for the Swiss banking commission.

She added: "In addition, we received complaints from a worrying number of clients from 1996 indicating big trouble with this company.

"We suspected fraud because Paramount was selling shares of a New Zealand company it owned that had no market value and the company had no activities. Clients were told beautiful things about that company that were not exact, and that's fraud.

"If Paramount had been a fit and proper business we would have allowed it to adapt to the new regulations, but our liquidator didn't find any documents relating to the activity of the company. They did not respond to our letters and we had great fears for the interests of our investors."

Mr Lowry was detained for a year before being charged, and he was refused bail seven times before his trial opened last month. For 17 months he has shared a five-person cell with 13 others.

Lisbon's Caxias prison authorities were reluctant to admit journalists, so I pretended to be an old friend in order to meet Mr Lowry, embracing him warmly in the prison's cafeteria-like visiting area.

"It's difficult being locked up with 13 people 21 hours a day, 24 hours if it's raining," he says. "But now I'm charged I can read the file a year on and see what the police put in. It's a story built up in secret; there's no evidence.

"I think they realised in June last year they'd made a mistake and thought 'Cripes, they've got the wrong guy', but there's no way to go back or say sorry."

Mr Lowry's prolonged detention without charge, and perceived irregularities in the police investigation and legal procedure, prompted Edward Fitzgerald QC, a British human rights lawyer, to pursue a complaint against Portugal on Mr Lowry's behalf at the European Commission of Human Rights in Strasbourg.

"Portugal has signed the European Convention on Human Rights, but hasn't updated its penal code since the days of the dictator Antonio Salazar, when it was usual to detain suspects for a year without charge or evidence," said Gudrun Parasie, a barrister assisting Mr Lowry with his human rights suit. "Portugal's has one of the worst penal systems in Europe."

Craig Heesch, a retired Los Angeles policeman and former FBI undercover operative, is in Lisbon mobilising support for his friend Mr Lowry, with whom he used to collaborate in investigating white-collar crime in US off-shore trusts.

"I'm convinced he's innocent," says Mr Heesch, who has rented a flat in nearby Cascais with his wife to be on hand during the trial.

He said: "International telesales are perfectly legal in the US. Mr Lowry took Portuguese legal advice to comply with Portuguese regulations before setting up in Lisbon, and the companies whose shares he sold were genuine.

"Complaints date from after the raid on Paramount, which obviously ruined the market."

Mr Heesch rejects the claims of the Swiss Banking Commission, saying the body has no authority to investigate criminal fraud. "They've subjected Paramount Switzerland to an ordinary administrative closing that affects many companies in Switzerland that don't follow their laws," he says.

Mr Lowry supplies glowing references from Professor William Twyning, a British lawyer, and Don Rogers, a former FBI special agent who met Mr Lowry through Mr Heesch. Each has drawn up a detailed report claiming to establish Mr Lowry's bone fides and rebutting allegations against him.

Joao Silva Herdeiro, a lawyer, represents 16 of some 500 clients he says are eligible to claim compensation from Paramount.

"We have clients who went to the US to check if the companies they had bought shares in really existed, and they verified they were no more than mailboxes, legal entities without any material activities.

"If they had really existed, they would have survived the closure of Paramount, which was only the broker."

Jan Engelund, a Danish owner of a computer and telecommunications company, says he thought he was entrusting his money to a regulated Swiss broker when he invested in DW Filters, a start-up company producing a water filter for poor countries, and Global Connect Direct , which offered cheap international telephone connections by buying from big firms at a cut rate.

"I smelled a rat when I received no response to letters and faxes. I went to the DWF address in Florida but there was no sign of the company.

"The maintenance man at the building said he'd never heard of it. The GCD's address turned out to be a letter box in a small shop whose owner said he had never seen anyone open the box," he said.

Mr Engelund declined to say how much he invested in the two companies, but says he lost it all. Mr Lowry says Mr Engelund made only cursory inquiries and the companies were closed for Christmas holidays.

Arts and Entertainment
books
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
PROMOTED VIDEO
Life and Style
3D printed bump keys can access almost any lock
techSoftware needs photo of lock and not much more
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
News
Dr Alice Roberts in front of a
peopleAlice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
The Digicub app, for young fans
advertisingNSPCC 'extremely concerned'
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Day In a Page

The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution