Sir Nicholas Lyell, the Attorney General, misled Parliament over the trial of Roger Levitt, the investment adviser whose unexpectedly lenient sentence after being accused of fraudulent trading provoked a national outcry.
Confidential documents obtained by the Independent - including a transcript of the meeting at which the judge gave his views on a plea bargain - show that the Crown made repeated offers of increasingly lenient terms and finally made a deal with Levitt making it most unlikely he would go to jail.
He was sentenced to 180 hours' community service on 26 November 1993.
Two weeks later, however, on 9 December, the Attorney General told MPs: "The Serious Fraud Office was not aware that the judge would impose a non-custodial sentence when it informed the defence that the proposed plea of guilty by Roger Levitt was acceptable."
On 16 December, Sir Nic- holas informed the House: "I have been assured by prosecuting counsel that, although potential pleas may have been discussed on a counsel-to-counsel basis, no offers were made by the Crown to Mr Levitt."
Levitt was initially charged by the Serious Fraud Office on 62 counts covering the entire spectrum of fraud. He had been accused of lying to Fimbra, the City watchdog, of falsifying accounts and of representing investors' money as his own "fees". The Levitt Group investment company, based in north London, crashed with debts of pounds 34m. Among clients who lost money was the author Frederick Forsyth. Levitt ploughed pounds 900,000 of Mr Forsyth's money into his business instead of investing it in bonds as he was supposed to do.
The case came to court at a time when the Serious Fraud Office was struggling to maintain credibility after a series of set-backs in high-profile cases.
It was against this background that Levitt's senior solicitor, Geoffrey Goldkorn, wrote to his client on 5 November, saying: "I am now setting out the main points of our discussions regarding Crown overtures regarding guilty pleas." The letter sought to persuade Levitt to accept Crown terms that would inevitably mean a light sentence.
Mr Goldkorn wrote: "Mr Cocks, QC for the prosecution, has telephoned Mr Goldberg [defence QC] subsequently to say that he has taken instructions from a high level (unspecified) and this does indeed represent the best and final offer of the prosecution."
But Levitt was adamant that he would not consider spending any time in prison, and in the early morning of 22 November George Staple, director of the SFO, met David Cocks at Chichester Rents where the trial was to take place. After a two-hour discussion, Mr Cocks handed a letter to Jonathan Goldberg, confirming the SFO was willing to drop all charges against Levitt in exchange for a guilty plea to the minimum allegation of misleading Fimbra.
The deal was explained to Mr Justice Laws, in private session in chambers, who said: "On the specific basis of the prospective plea outlined to me - namely that there will be an admission of the deceptions of Fimbra, but no admission of any other part of the case - I would not pass an immediate prison sentence."
The leniency of the sentence caused a storm of protest and prompted questions in the House of Commons about whether the Crown had offered plea bargaining, and whether it was aware that the judge would impose a non-custodial sentence following the deal.
The Serious Fraud Office still maintains that no formal plea bargain was struck, and that it was amazed when Levitt escaped a jail sentence. Mr Cocks said on television on 6 March 1994: "When I realised Levitt would get 180 hours' community service I was astonished. It's quite untrue to say that the SFO, or I, or any counsel prosecuting, knew what the result was going to be when we accepted the plea." Mr Cocks could not be contacted last night.
The Attorney General's office said last night that it was "satisfied that he did not mislead the House". The SFO said its "position was set out in a series of Parliamentary Questions and it has nothing further to add".
How the deal was done, page 4
Leading article, page 14