US bank that 'snaffled $40m'

The Maxwell Trial; Day 51
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The Independent Online

Financial Correspondent

Kevin Maxwell had a $40m headache one week before his father's death because, he complained to a meeting, an American bank had "snaffled the funds".

The Old Bailey fraud trial was told this yesterday by corporate solicitor, David Fairfield, who made notes at the meeting on 29 October 1991. Seven days later Robert Maxwell was found dead in the Atlantic ocean.

The solicitor said the "snaffling" was the work of Lehmans, another American bank, during a foreign exchange deal for the Robert Maxwell Group. Lehmans, which was also owed money by the Maxwells, took the cash from the sale of assets itself instead of passing it on to Citibank

Mr Fairfield said Kevin Maxwell decided to pay Citibank by using some of the sale proceeds of, Que, a computer publishing company, a subsidiary of Macmillan, which in turn was then owned by Maxwell Communications Corporation (MCC).

The solicitor, from Titmus Sainer Webb, said this created another problem because the debt to Citibank was owed by the privately owned Robert Maxwell Group (RMG). He was told by Kevin that the proceeds of the Que sale could be transferred to RMG to repay money owed to it by MCC.

Alun Jones QC, defending Kevin, suggested to him that if Kevin had told him that MCC owed money to RMG he would have made a note of it. Mr Fairfield agreed he had not made a note but said: "My recollection is that he did tell me this."

Mr Jones said that the previous August it was reported that the inter- company debt situation was completely the reverse; that RMG owed pounds 300m to MCC. The solicitor replied that he had no knowledge of the August situation. Asked if, when he discovered later that RMG owed money to MCC, he had sent a letter to Kevin about the matter, he replied: "I personally did not do so."

Mr Fairfield said: "I was not happy to say to a client 'That cannot be right', especially not to someone like Kevin Maxwell. He is a very authoritative man and a much respected client.".

In the dock are Kevin Maxwell, his brother, Ian, and a former Maxwell aide, Larry Trachtenberg. All deny conspiracy to defraud by their misuse of pension fund assets. The trial continues today.